TLDR
- Tesla stock fell 1.2% Thursday morning to $328.12, marking its fourth decline in five trading sessions
- Growing tensions between Elon Musk and President Trump over government spending may be weighing on investor sentiment
- German sales data showed Tesla deliveries dropped 36% year-over-year in May, continuing weak European performance
- A Bloomberg story about a fatal 2023 crash involving Tesla’s driver assistance software resurfaced concerns about autonomous driving safety
- Stock remains up 90% over past 12 months despite recent volatility ahead of Austin Robotaxi launch
Tesla shares continued their recent slide Thursday morning, dropping another 1.2% to $328.12 as investors grappled with multiple headwinds facing the electric vehicle maker.
The decline marked the fourth loss in just five trading days for Tesla stock. This comes despite broader market strength, with S&P 500 and Dow futures trading higher in early sessions.
Wednesday’s 3.6% drop appears to stem from several factors converging at once. Political tensions between CEO Elon Musk and President Trump have escalated in recent days.
Musk harshly criticized Trump’s “One Big Beautiful Bill” spending proposal. He even threatened to “fire” politicians who supported the legislation.
The Tesla CEO recently completed his tenure as a special government employee. Many Tesla investors would prefer Musk distance himself from political controversies entirely.
Political Baggage Hurts European Sales
Musk’s political involvement may be directly impacting Tesla’s business performance. Wednesday brought fresh evidence of weak international sales data.
Tesla deliveries in Germany plunged 36% year-over-year in May. The sharp decline reflects broader challenges Tesla faces in European markets.
Some analysts have linked Musk’s political positions to declining Tesla sales in 2025. The company has struggled to maintain momentum in key international markets.
European consumers appear increasingly hesitant to purchase Tesla vehicles. Musk’s controversial political stances may be alienating potential buyers.
Safety Concerns Resurface
A Bloomberg article about a fatal 2023 Tesla crash gained traction Wednesday. The story ranked among the news site’s most-read pieces of the day.
The crash involved Tesla’s driver assistance software and raised questions about autonomous driving safety. This timing proves particularly sensitive as Tesla prepares to launch its Robotaxi service.
Tesla plans to debut the AI-trained robotaxi service this month in Austin, Texas. The service represents a crucial growth catalyst for the company’s future.
However, the 2023 accident involved an older version of Tesla’s software that required full driver supervision. Musk has previously addressed sensor issues and glare-related problems on earnings calls.
The April 22 first-quarter earnings call specifically covered improvements to Tesla’s ability to handle challenging driving conditions. These include situations involving glare that contributed to the 2023 crash.
Profit-Taking After Strong Run
Some of Wednesday’s selling pressure may simply reflect profit-taking after a strong rally. Tesla shares had surged approximately 45% since the company’s earnings call.
The stock climbed more than 23% in May alone, far outpacing the S&P 500’s 5.5% gain. This helped Tesla recover from deeper losses earlier in the year.
Coming into Thursday’s trading, Tesla remained down about 18% year-to-date. However, the stock still shows gains of roughly 90% over the past 12 months.
Musk’s decision to step down from President Trump’s Department of Government Efficiency helped fuel May’s rally. Investors welcomed news that Musk would focus more attention on Tesla’s business.
The CEO announced plans to allocate more time to Tesla starting in May. He officially stepped down from the government role last week.
Tesla’s automotive revenue fell 20% year-over-year in the first quarter. The company hopes new lower-cost models and Robotaxi will revitalize growth.
Musk recently posted on X that Tesla has been testing self-driving Model Y vehicles without drivers. He claimed the tests have been incident-free and are running ahead of schedule.
For the past several days, Tesla has been testing self-driving Model Y cars (no one in driver’s seat) on Austin public streets with no incidents.
A month ahead of schedule.
Next month, first self-delivery from factory to customer.
— Elon Musk (@elonmusk) May 29, 2025
Tesla’s CFO Vaibhav Taneja said in April that new models and Robotaxi should create “a new era of demand” for the company. The stock trades at over 200 times earnings, reflecting high growth expectations.
With Tesla’s stock price-to-earnings ratio exceeding 200, investors are clearly betting on strong future growth. The success of the Robotaxi service remains crucial to justifying current valuations.
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