TSLA – Daily Chart
TSLA trades around the $244.64 level, which marked the open after the Trump election win. The stock may try and mount a rebound here.
Elon Musk’s political moves have hurt the EV maker’s sales in recent months. With the political world being very polarized, Musk’s close alignment with Donald Trump has led to protests, vandalism and slumping sales in key regions.
Tesla shares rallied around 40% after Trump’s election win as investors assumed that it could lead to benefits, such as a smoother path to autonomous driving. However, that has not been the case as the negatives have outweighed the positives in the first months.
Tesla has now given up all of its post-election gains and looks for support to regain a bullish tone. The main reason for the decline is that sales of Tesla’s vehicles have been falling. Automotive revenue in the final quarter of 2024 was down 8% year on year to $19.8bn. Total revenue was $25.7bn, up 2% from the previous year but below analysts’ expectations of $27.1bn. Operating profit also fell by 23% to $1.6bn as the company’s price wars hurt margins.
The upcoming global sales report on 2 April will be a key test as the European Automobile Manufacturers’ Association said sales in Europe were down -45% in January compared to the same month last year. There is also talk that sales have fallen in China and Australia.
Wall Street analysts had been expecting over 400,000 deliveries in the quarter, but now some estimates see the figure falling below the 387,000 mark reported a year ago. For the full year 2025, analysts predict sales of about 2m EVs, up from 1.8m in 2024. That is also well below Musk’s earlier promise of 20-30% growth.
Despite the 40% slump in the stock in 2025, the company’s valuation is still not cheap at more than 8X sales and a price/earnings ratio of 120. Investors are always happy to pay a “Musk premium” for the stock on the idea that the founder could surprise investors at any turn with a new technology. However, it seems that the latest surprise was unexpected with many Democrat voters walking away from Tesla.
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