Tesla (TSLA) Plunges 6.47% Amid Musk's Political Turmoil

On April 4, 2025, Tesla's stock dropped by 6.47% in pre-market trading, reflecting a significant decline in investor confidence.

Tesla's recent troubles can be traced back to Elon Musk's controversial tenure as the head of the newly formed "Government Efficiency Department" under the Trump administration. Musk's aggressive reforms, including AI audits and significant layoffs, sparked widespread backlash from both political figures and the public. This political turmoil led to a series of protests and boycotts, with some even resorting to burning Tesla vehicles in public.

The legal battle involving a Tesla Model S that caught fire after a minor collision has also added to the company's woes. The court's decision to dismiss the car owner's lawsuit, citing a lack of evidence linking the fire to a manufacturing defect, has further damaged Tesla's reputation. The car owner has vowed to appeal the decision, but the incident has already left a lasting impact on consumer trust.

Tesla's first-quarter performance in 2025 was particularly dismal, with vehicle deliveries dropping by 13% compared to the same period last year. This decline was exacerbated by Musk's political involvement, which alienated a significant portion of the company's customer base. The political polarization surrounding Musk has led to a sharp decrease in consumer confidence, with many potential buyers expressing reluctance to support a brand associated with controversial political figures.