Tesla Shares Drop Over 16% In A Month, Is The Honeymoon Period Over For Elon Musk's EV Giant?

After a blistering end to 2024, which saw Tesla shares and sales, which in essence support the surge of its share increase, Tesla appears to have come to a crossroads. The company, which usually focuses on its holiday and year-end sales, once again has seen its prospects drop at the beginning of 2025.

Tesla Sales Drop

The Elon Musk-led company's sales dropped nearly 60 per cent in January compared to last year. One of the biggest drivers is avenues that Musk himself has aggressively upset, namely Western and Northern Europe.

Even, in his own backyard, the demand for his cars in the US's richest state of California dropped in January.

And its not just its sales; a natural reflection of the company's performance in the real world is seen at the vacillations on Wall Street.

Over the past month of trade, the Elon Musk-led company has performed poorly at the equity markets.

The EV maker has seen its shares decline in value by a massive 16.43 per cent or USD 69.67.

Just yesterday, that is Thursday, February 20, the company shares dipped by a sizeable 1.71 per cent or USD 6.16. This has brought the overall value down to USD 354.40.

So, is this Honeymoon Over For Musk?

The question, therefore, is simple, are things starting to vain for Musk, and is he to blame?

The question may be deceptively simple, but the answer is not.

While, many have indicated, and pointed to Musk and his antiquities, politically speaking, that have ruffled, many feathers, in fact, the whole nest, there are other possible factors at play.

Hybrid Hurricane

The sale of hybrids and the interest in these Hybrid cars has seen major interest, specifically over the past year or so, this has clearly not aided Tesla, as it only makes electric vehicles, that don't give you a hybrid option.

Compared to other brands, traditional players, and newbies alike, who do give this option.

The rapid transition from fossil fuel-run vehicles to battery-run cars has slowed down, as so has the visible appetite for it.

Trump's Boomerang

In addition, the Trump administration's policies, or future policies that are perhaps in the pipeline, do not necessarily aid Musk's biggest source of revenue to his nearly USD 400 billion-vast personal wealth.

Trump does not seem particularly keen on EVs, anything green or sustainable. In addition, he has doubled down on the use of hydrocarbons, with his 'Drill Baby Drill' war cry.

Is all hope gone? not necessarily. The company, along with BYD continues to hold the lion's share in the EV market. According to a January 14, 2025 Statista report, Tesla continues to lead the market ahead of its Chinese rival BYD. Tesla is also looking to explore newer markets, like India.

But, being the king of a shrinking empire is no matter of thrill, and what lies in the future, is something that remains to be seen.