The CEO’s political influence is suggested by some as a big reason for a drop in share price this year. Electric vehicle manufacturer Tesla has for some time now been one of the standout names in both American industry and American stock market favourites, but - for the moment, at least - it seems the party is being cut short.
Tesla sold fewer than 10,000 vehicles across Europe in January, which marks a fall of a massive 45 per cent compared to a year ago when they sold over 18,000, reports the European Automobile Manufacturers’ Association (ACEA). In the EU, the drop is even higher at 50 per cent. The company’s share of the market also almost halved, from 1.8 per cent down to one per cent.
Those details emerging, along with a general downward trend beforehand, saw the Tesla share price plummet more than eight per cent on Tuesday, dropping the market capitalisation of the organisation below one trillion dollars (£790bn) and to its lowest point since two days after Donald Trump won the US election.
But while new battery-electric car sales grew by just over a third (34 per cent) last month, Tesla sales are headed the other way. Ginny Buckley, chief executive of Electrifying, said: “Tesla has been instrumental in driving EV adoption, but Elon Musk’s personal brand appears to be polarising. Consumers now have more choice than ever, and it’s clear some are turning away from Tesla to explore other options.”.
There is not always a definitive statement or reasoning as to why consumers may choose one brand over another of course, but the significant drop in sales after Mr Musk congratulated a German right-wing political party and accused UK prime minister Keir Starmer of covering up grooming gangs scandals may be indicative of people making their choices accordingly.
Earlier this month, Mike O’Rourke, chief market strategist at Jonestrading, wrote in a research note: “There is an argument to be made that Tesla is beginning to be penalized for Musk’s close relationship to Trump.”. With brands such as BYD, Volkswagen and plenty more betting big on the future of EVs, Tesla might have headed up the early runnings of the race, but it’s far from won just yet.
