Is Elon Musk’s empire collapsing? Tesla suffers another blow to the stock market
Tesla suffered a tough day on Wall Street on Monday, seeing the stock price fall by 15 percent. What this means for Elon Musk’s business empire.
The significant role billionaire Elon Musk has played in the early weeks of the Trump administration cannot be understated. President Trump has publicly praised Musk on multiple occasions, even as, according to The New York Times, other key members of his team grow increasingly frustrated with the billionaire and his associates. Though Musk’s exact role in the administration remains unclear—some White House officials have contradicted Trump’s assertion that he leads the newly established Department of Government Efficiency—his influence in Washington is being felt through this new agency.
Musk owns major companies, including Tesla, X (formerly Twitter), SpaceX, and The Boring Company—many of which have benefited greatly from government contracts. His proximity to the president could help ensure those contracts continue over the next four years. However, Tesla faces more existential financial troubles.
As an electric vehicle manufacturer, Tesla’s customer base largely consists of climate-conscious consumers who choose EVs over combustion-engine cars to reduce their carbon footprint. In 2023, the research group Strategic Vision found that Democratic EV owners outnumbered Republican owners by more than two to one. However, Politico reported that same year that EV adoption among GOP voters was growing. With Musk’s rising profile among Trump supporters, it remains to be seen whether Republican buyers will offset any decline in Tesla sales from Democrats frustrated by his political influence.
Consumers internationally are moving away from Tesla
On Monday, Tesla’s stock dropped 15% in a single day—an alarming sign ahead of its first 2025 quarterly report next month.
News that consumers are moving away from Tesla does nothing for investor confidence. According to The Irish Times, Tesla registrations in Germany fell 59% between January 2024 and January 2025. Reuters reported similar declines across Scandinavian countries, with Market Watch highlighting the same trend in China, where from January to February orders dropped by half.
Musk’s other ventures might fair better than Tesla under President Trump
While Musk’s other ventures, like SpaceX, may see increased business under Trump, the president has made clear his opposition to electric vehicles and the mandates imposed by the Biden administration. Meanwhile, Musk has already leveraged his role in government to propose that his company, Starlink—which provides satellite internet—replace Verizon in modernizing systems at the Federal Aviation Administration. CNN reported that Musk’s push to sideline Verizon presents a conflict of interest, which could spark backlash from other private-sector players.
This situation highlights how Musk could use his proximity to the administration to align federal spending with his business interests—despite Trump’s claims that he would prevent such influence. The White House’s handling of the Starlink-Verizon dispute will be a key test of its willingness to address potential conflicts of interest.
The previous White House and Congress worked to enshrine EV tax credits into federal law and set policies favoring EV manufacturers. However, Trump has since rolled back Biden-era rules and has opposed any congressional efforts to reinstate them.
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