Musk Can’t Dodge Tesla’s $660 Billion Slump
Investors need to see new, lower-priced EV models and the launch of a robotaxi service to keep the faith.
Hurting the brand.
Photographer: David Ryder/Getty Images North AmericaElon Musk’s embrace of President Donald Trump and de facto direction of the Department of Government Efficiency was initially greeted with rapture. Tesla Inc.’s stock soared almost 80% in six weeks after the election, taking it to a new record market cap of $1.54 trillion. That Trump bump has since almost completely evaporated, with Tesla shedding about $660 billion in value. To put that amount in perspective, it is bigger than what the entire market cap was only about six months ago.
This roundtrip was fueled in large part by nonsense. Musk’s political elevation was pitched by bulls as a means to get government off Tesla’s back, especially when it comes to launching robotaxis. The argument elided the salient points that (a) existing federal laws aren’t a big impediment to autonomous driving and (b) Tesla still doesn’t have a functioning commercial robotaxi anyway. Another of Musk’s companies, Space Exploration Technologies, or SpaceX, with its big government contracts and national defense dimension, was always better positioned to — how to put this delicately — leverage its chairman’s high-level contacts (see this).