TSLA shares have dropped to test the $300 level with an April resistance level adding further support near $292. This is an important test for the stock or a further downtrend can happen.
Musk was critical of Trump’s new spending bill, which he said was “insane”. That was followed by Trump saying he would end government subsidies for Tesla and deport the billionaire to his place of birth, South Africa.
The company has received at least $30 billion in federal support since 2010, while the typically bullish Tesla analyst, Dan Ives, called it a “soap opera that remains an overhang on Tesla’s stock”.
“Elon may get more subsidies than any human being in history, by far, and without subsidies, Elon would probably have to close up shop and head back home to South Africa,” Trump posted on social media.
Meanwhile, the EV maker continues to struggle with its European sales. According to the latest data, TSLA registrations were down 61.5% in Denmark and 64.4% in Sweden last month. That is a problem for the company as the euro region is the company’s second-largest market and a key demand driver for future global EV demand.
There were reports that Musk will personally oversee European sales after firing Omead Afshar, the previous vice president of manufacturing and operations, last week. The European sales slump is being worsened by competition from European EV models and China.
The problem is also coming at a time when EV adoption is still growing at a fast pace across Europe. The latest sales data is a weight on revenue forecasts, and margin expectations. Investors and car buyers are also worried about brand perception, making it harder to correct the recent slump.
Tesla shares are back on the bearish sentiment and they need to see a move higher from these levels or the $300 price becomes the resistance for further losses. The stock remains prone to volatility on Musk’s moves, with a rally on leaving his White House work, turning to losses on the Trump fallout. It may need some new announcements to find its old glory.
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