How Trump’s efforts to help Tesla could hurt it

A banner is left outside a Tesla showroom during a demonstration, in Lisbon, Sunday, March 9, 2025. (AP Photo/Armando Franca)

Donald Trump’s efforts to help Tesla could end up hurting it.

The U.S. president said Tuesday he will buy a Tesla as a show of support for CEO Elon Musk’s electric carmaker as it faces boycotts and even vandalism. But if Trump’s intention is to help reverse the frightening plunge in Tesla’s stock, he could have the opposite effect by turning off even more buyers.

“Tesla is becoming a political symbol of Trump and DOGE, and that is a bad thing for the brand,” said Wedbush Securities financial analyst Dan Ives, referring to the advisory group in charge of cutting government spending. “You think it’s helping, but it’s actually hurting.”

In an overnight post on his Truth Social platform, Trump said Musk is “putting it on the line” to help the country. Trump claimed in the post that “Radical Left Lunatics” were attempting to “illegally and collusively boycott Tesla, one of the World’s great automakers, and Elon’s ’baby.”

Trump’s message came after one of the worst single day sell-offs in Tesla’s history. The stock was up in afternoon trading Tuesday, rising nearly 5%.

In a message on X, Musk expressed confidence, writing that the stock “will be fine long-term.”

Tesla has been pummeled this year under competition from rival electric vehicles, particularly out of China, as well as his close association with Trump and with far right causes globally.

Shares have plummeted 45% in 2025 and on Monday tumbled more than 15% to $222.15, the lowest since late October, reflecting newfound pessimism as sales crater around the globe.

Numerous auto industry analysts have attributed Tesla’s recent sagging stock — and auto sales — to Musk’s support of Trump and other far right candidates around the world. In recent days, Tesla showrooms in the U.S. have been besieged by protesters, its vehicles vandalized on the street. Tesla owners, perhaps in a bid to avoid being targeted, have placed bumper stickers on their cars with messages like, “I bought it before Elon went nuts.”

Federal prosecutors charged a woman in connection with a string of vandalism against a Colorado Tesla dealership, which included Molotov cocktails being thrown at vehicles and the words “Nazi cars” spray painted on the building.

Musk pumped $270 million into Trump’s campaign heading into the 2024 election, appeared on stage with him and cheered Trump’s victory over Democratic candidate Kamala Harris in November. Tesla stock soared to $479 per share by mid-December, but are now trading around $230 per share.

That drop could hurt the company in the coming year in two ways.

First, Tesla offers many of its workers the chance to buy shares at a discounted price as a way of incentivizing them. But with the stock down sharply, this discounted price offered last year is in many cases higher than the stock is currently trading, meaning there is no discount at all and the incentive is worthless.

Second, the price drop could limit Tesla’s ability to raise money by selling newly created shares to investors to fund research and expansion. In 2020, the company sold $12 billion worth of shares as it was building factories in Berlin and Texas and pouring money into self-driving technology. A falling stock price means it will get far less in proceeds in any future so-called secondary offerings, though slumping sales means it may not need to expand soon.

Musk has become the face of the Trump administration’s slash-and-burn government downsizing efforts, known as the Department of Government Efficiency, or DOGE. The department has promised massive federal worker layoffs and aims to drastically reduce government spending.

Analysts have said Musk’s shift to right-wing politics doesn’t appear to sit well with potential Tesla buyers, generally perceived to be wealthy and progressive consumers.

Tesla sales are falling precipitously in California, the company’s biggest U.S. market, and the company recorded its first annual global sales decline last year. Similarly, Tesla sales plunged 45% in Europe in January, according to research firm Jato Dynamics, even as overall electric vehicle sales rose. The sales numbers were particularly bad in Germany and France.

The latest auto sales figure from China show that Tesla sales there have been nearly halved from February a year ago, although the decline is largely due increased competition from domestic EV companies.

But sales in the U.S. have fallen due to competition, and a country sharply divided about Trump.

U.S. Analysts at UBS Global Research expect deliveries to fall 5% in the first quarter and full year compared to the same periods for 2024.

“Our UBS Evidence Lab data shows low delivery times for the Model 3 and Model Y (generally within two weeks) in key markets which we believe is indicative of softer demand,” they wrote.

In addition to backing Trump, Musk has also shown support for the far-right, pro-Russian, anti-Muslim party in German y, called the British p rime minister an “evil tyrant” and called Canada — a major Tesla market —“not a real country.”

Tesla is not the only Musk-led company to run into trouble recently. His X social media platform crashed several times on Monday, which Musk claimed was a “massive” cyberattack. But like the clear-cutting he’s done with federal jobs, Musk slashed the number of employees at X and technology experts warned of increased vulnerability.

Last week, a rocket launched by Musk’s SpaceX exploded and broke apart over Florida, about two months after another of the company’s rockets failed.

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Bernard Condon, The Associated Press