Tesla Stock Crashes Amid Controversies, Market Turmoil, and Political Backlash

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Tesla’s stock (TSLA) experienced a massive 15% drop on Monday, marking one of its worst trading days since going public in 2010. This sharp decline wiped out the stock’s gains from Donald Trump’s election victory in November, leaving Tesla down more than 50% from its mid-December peak—equivalent to an $800 billion loss in market value.

The stock’s collapse is being attributed to multiple factors, including declining deliveries, economic uncertainty, increasing competition in the EV market, and CEO Elon Musk’s growing political controversies. The turmoil has also fueled a boycott movement, Tesla Takedown, urging customers and investors to distance themselves from the company.

Tesla’s Stock Crash: The Key Causes

1. Economic Slowdown & Market Volatility

One of the primary reasons behind Tesla’s stock decline is the broader economic downturn. Concerns about an impending recession, coupled with high-interest rates, have led to a decline in investor confidence.

Tesla, which relies heavily on consumer spending and government incentives for EV adoption, is particularly vulnerable to economic slowdowns. With higher borrowing costs and reduced discretionary spending, demand for Tesla’s high-priced electric vehicles may weaken.

2. Tesla’s Missed Delivery Targets

For the first time in its history, Tesla failed to meet its annual vehicle delivery targets, sending a wave of panic through the market. Analysts had predicted that Tesla would deliver 504,800 vehicles, but the company fell short, reporting 495,600 deliveries【34】.

This shortfall, while relatively small, signals potential issues in Tesla’s supply chain, production, or consumer demand, raising red flags for investors.

3. Elon Musk’s Political Controversies & Social Media Outbursts

Elon Musk has been at the center of multiple political controversies, which are now impacting Tesla’s brand image and investor confidence.

Musk recently amplified a post highlighting the historical ties of automakers like Mercedes and Volkswagen to the Nazi regime.

In response to actress Alyssa Milano trading her Tesla for a Volkswagen EV, Musk sarcastically posted, “Alyssa Milano loves Hitler”, sparking widespread criticism.

Musk also engaged in baseless conspiracy theories, linking Tesla protests and alleged attacks on Tesla property to unnamed "Democratic NGOs."


4. The Tesla Takedown Movement & Public Backlash

Musk’s political activism has contributed to the rise of the Tesla Takedown movement, a coordinated campaign to boycott Tesla vehicles and encourage investors to sell their stock.

The movement was launched following Musk’s controversial political engagements and his association with far-right figures.

Protests have been organized at Tesla showrooms worldwide, with demonstrators calling for investor divestment and accusing Musk of spreading misinformation and hate speech.

Tesla dealerships have been targeted in scattered attacks, including vandalism and arson—although no definitive links between protesters and these acts have been established.


5. Cybertruck Fire & Musk’s Conspiracy Claims

A fire at a Tesla lot in Seattle late Sunday night damaged several Cybertrucks, further fueling the crisis. While authorities are still investigating the incident, Musk promoted a conspiracy theory suggesting that the fire was part of a coordinated “terror attack” by Democratic NGOs.

In reality, no evidence has been found linking any political groups to the incident. Still, Musk's unsubstantiated claims contributed to further volatility in Tesla’s stock price.

6. Growing Competition in the EV Market

Tesla is facing stiff competition from both legacy automakers and new EV startups:

Companies like Rivian, Lucid Motors, Nio, and BYD are gaining ground in the EV market, offering cheaper alternatives to Tesla’s premium-priced cars.

Ford, General Motors, and Volkswagen have ramped up their EV production, benefiting from government subsidies that Tesla no longer qualifies for.

Tesla’s high-end models are losing market share, as consumers explore more affordable and feature-rich options.


7. Institutional Investors Are Losing Confidence

Institutional investors, once strong supporters of Tesla, are now reconsidering their positions. Several investment firms have downgraded Tesla’s stock, citing:

Declining public perception due to Musk’s controversial statements.

Weaker-than-expected financial performance and delivery numbers.

Regulatory concerns surrounding Tesla’s Full Self-Driving (FSD) technology.


Musk’s Response: Attempting to Stabilize Tesla’s Image

Despite the chaos, Musk continues to promote Tesla on his social media platform, X (formerly Twitter).

He shared TikTok videos of Tesla’s Model Y, highlighting its design and features.

He promoted Tesla’s upcoming Cybercab, a two-seater robotaxi, set to launch in 2026.

He amplified pro-Tesla statements from controversial right-wing figures, further fueling political tensions.


Musk’s strategy appears aimed at rallying his loyal fan base to support Tesla during the downturn. However, investor sentiment remains shaky, and financial analysts warn that Tesla’s market troubles may persist if its leadership continues to be distracted by political controversies.

What’s Next for Tesla?

Tesla now faces a critical period in 2025. The company must:

Regain investor trust by demonstrating strong sales and innovation.

Navigate regulatory challenges related to FSD and autonomous driving.

Address public backlash by focusing on Tesla’s core EV and energy products rather than political discourse.


For now, Tesla’s stock remains highly volatile, and the company’s future
 will depend on how well it manages these economic, competitive, and reputational challenges.