Tesla investors are hoping Elon Musk is finally giving his bureaucracy chainsaw a breather.
What happened: The EV maker had an abysmal earnings call this week, posting a staggering 71% drop in net profit. Citing “changing political sentiment” as a major factor hampering sales, Tesla’s revenue saw its biggest year-over-year decline in over a decade.
- Shares in the company are now down ~48% from their peak in mid-December. Only five other S&P 500 stocks have performed worse this year.
Why it’s happening: Musk’s foray into politics has created a serious brand image problem for Tesla at a time when more affordable Chinese EVs are aggressively growing market share.
- According to a recent Yahoo News/YouGov poll, 67% of Americans now say they wouldn’t buy or lease a Tesla. Over half of them say it’s because of Musk himself.
Yes, but: Investors are still convinced that Musk is the best person to get Tesla back on track — shares rallied yesterday on news that he would reduce his involvement with the Trump administration and refocus on the carmaker.
Why it matters: For now, it seems the personal politics and behaviour of Tesla’s eccentric CEO is driving its stock price more than any fundamentals in the EV sector.—LA