Tesla (TSLA) Stock: Shares Plunge Amid Insider Sales and Musk’s White House Role
TLDR
Tesla stock has dropped over 28% in February, marking its worst month since December 2022
Insider sales including Chair Robyn Denholm’s $33.7 million share sale have fueled negative investor sentiment
February coincided with CEO Elon Musk’s first full month in the White House as head of the Department of Government Efficiency
Rising anti-Tesla sentiment has emerged across Europe and the US, with protests and vandalism reported
Despite current troubles, some analysts like Morgan Stanley’s Adam Jonas remain optimistic about Tesla’s AI and robotics potential
Tesla’s stock has started March the way it ended February: in decline. The electric vehicle maker has seen its shares tumble 28% in February alone.
This marked Tesla’s worst monthly performance since December 2022. The decline coincided with CEO Elon Musk’s first full month in the White House as part of President Donald Trump’s administration.
Musk now leads the Department of Government Efficiency, known as DOGE. This government role has pulled Musk’s attention away from Tesla’s day-to-day operations.
The stock slide continued into early March with another 3% drop on the first trading day of the month. This pushed Tesla’s market cap down to approximately $915 billion.
Insider sales have contributed significantly to the stock’s volatility. Chair Robyn Denholm sold $33.7 million worth of shares recently.
This followed similar sales by Kimbal Musk, Elon’s brother. These sales are reportedly tied to planned trading strategies and a court settlement over overpayment issues.
The company’s fourth-quarter earnings report revealed concerning trends for investors. Automotive revenue sank 8% compared to the previous year.
Operating income dropped by 23% in the same period. Tesla cited reduced average selling prices across its vehicle lineup as a major factor in this decline.
Trump’s Tariffs
The company faces additional challenges from new tariffs being implemented by the Trump administration. These tariffs apply to goods and materials from Canada and Mexico, where some of Tesla’s key suppliers are based.
Musk’s political activities have also affected Tesla’s image and stock performance. His role in the White House involves making cuts to the federal workforce and slashing spending.
On social media platform X, which Musk owns, he has become more involved in international affairs. This includes promoting Germany’s far-right party and making controversial statements about Ukraine.
In response, anti-Musk and anti-Tesla sentiment has grown across Europe and the United States. Protests have occurred at Tesla showrooms in multiple locations.
An ad in London went viral after giving Tesla cars the nickname “Swasticar.” Dozens of Tesla vehicles were reportedly burned in a suspected arson attack in France.
Tesla’s new vehicle registrations have declined steeply in European markets. Sales fell in France and Scandinavia in early 2025.
In Germany, registrations plummeted by around 60% in January compared to the previous year. U.S. owners of Tesla’s Cybertruck have reported negative reactions ranging from rude gestures to harassment.
A movement called “Tesla Takedown” is encouraging people to divest from the company. The movement has gained support from celebrities including actor George Takei.
Despite these challenges, some analysts remain optimistic about Tesla’s future. Morgan Stanley’s Adam Jonas named Tesla his top pick in U.S. autos in early March.
Jonas cited Tesla’s potential in AI and robotics as promising growth areas. He views the current stock price as a good buying opportunity.
This assessment is based on Tesla’s shift toward a more tech-focused business model. However, Tesla faces increasing competition in self-driving technology.
Several companies are already operating commercial robotaxi services while Tesla’s CyberCab is not yet in production. Chinese automakers have begun offering partially automated driving systems that compete with Tesla’s options.
These competitors often provide similar features at a much lower cost than Tesla’s. On Tesla’s latest earnings call, Musk told investors the company plans to launch unsupervised Full Self-Driving as a paid service in Austin, Texas, by June.
This would be followed by driverless testing in other U.S. cities shortly after. Meanwhile, Alphabet-owned Waymo has announced it’s already providing 200,000 trips each week across San Francisco, Phoenix, and Los Angeles.
The overall analyst consensus on Tesla remains a “Hold,” reflecting mixed opinions about the company’s future prospects.
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Filed under: News - @ March 4, 2025 3:28 pm