Tesla’s $777 Billion Nightmare: Can a Trump Endorsement Reverse the Plunge?

In a dramatic and unexpected move, Donald Trump purchased a red Tesla Model S in a high-profile event at the White House, standing alongside Elon Musk as he praised the car’s technology and performance. But while this public endorsement grabbed headlines, it did little to stop Tesla’s stock from continuing its downward spiral.

The electric vehicle giant has seen its market capitalization slashed in half, dropping from $1.54 trillion in December 2024 to $777 billion by March 2025. Now, investors are left wondering: Is Tesla’s decline due to falling sales, Musk’s political controversies, or both?

Tesla’s Stock in Freefall—What’s Causing the Decline?

Tesla’s stock has been on a wild ride, but recent months have been particularly brutal. Sales numbers are down, competition is heating up, and Musk’s outspoken political views have put the brand at the center of controversy.

Some analysts believe that Musk’s public alignment with Donald Trump and far-right European politicians has alienated some of Tesla’s core customer base. For example, in Germany—one of Tesla’s biggest markets—car registrations plummeted 76% after Musk expressed support for Germany’s right-wing Alternative für Deutschland (AfD) party.

At the same time, Tesla is facing growing competition from Chinese EV makers like BYD and legacy automakers like Ford and GM, which are ramping up their electric vehicle production. Analysts predict Tesla’s Q1 2025 deliveries will be down 8% year-over-year, raising concerns about long-term demand.

Trump’s Tesla Purchase—A PR Move or a Real Endorsement?

Amid the turmoil, Trump’s purchase of a Tesla Model S is making waves. The former president, who has typically been a supporter of traditional American automakers, surprised many by publicly endorsing the vehicle. Standing next to Musk at the White House, he called the Model S a “remarkable piece of American engineering” and claimed he was eager to take it for a spin.

But was this a genuine show of support, or a strategic move to help Musk as Tesla’s stock takes a beating?

While Trump’s endorsement may help bolster Tesla’s reputation among conservative voters, it remains unclear whether it will have any real impact on sales.

Wall Street’s Verdict—Should Investors Buy or Sell?

Despite a recent 7.6% bounce in Tesla stock, analysts remain cautious about the company’s future.

Some experts argue that the stock’s valuation is still too high, noting that Tesla is trading at 89 times projected earnings—a multiple that some believe is unsustainable given slowing sales. Others warn that if deliveries continue to decline, the stock could fall even further in the coming months.

What’s Next for Tesla?

Tesla is at a crossroads. While the company continues to innovate in the electric vehicle and AI space, its stock is struggling under the weight of declining sales, increasing competition, and Musk’s unpredictable political moves.

Trump’s Tesla purchase may be a symbolic boost, but it remains to be seen whether it will have any real impact on the company’s financial performance.

For now, investors will be watching closely to see if Tesla can regain its momentum—or if this downturn is just the beginning of a much bigger problem.