Elon Musk's Tesla® Nightmare Keeps Getting Worse
Elon Musk in Colorado, 2022. Photo by Trevor Cokley. Public domain.
Just a few months ago, Elon Musk looked untouchable — again. Fresh off Donald Trump's re-election and basking in the glow of sky-high stock gains, the Tesla® CEO was sitting on nearly $300 billion in personal wealth. Today? Musk has lost a staggering $121 billion — so far — in 2025 alone. And Tesla, once the undisputed king of electric vehicles, is now a stock in freefall, down over 40% since January.
But don't rush to blame just one thing. This isn't your typical corporate stumble. What's happening with Tesla — and Musk — is a perfect storm of politics, market realities, international rivals, and perhaps, some overblown hype finally coming back to Earth.
A $100 Billion Blow: Just How Far Has Tesla Fallen?
$121 billion. That's how much net worth Musk has lost this year alone due to the drop in Tesla's share price, as CNN reported.
As of late March, Reuters reports that Tesla stock has tumbled by nearly 45% from its all-time high of $1.5 trillion in mid-December to around $845 billion — still a giant, but no longer a colossus. To put it in context, that's a bigger market value drop than the entire worth of Ford®, GM®, or Volkswagen®.
Yet, even after that decline, Tesla's valuation remains far above that of its industry peers. Its current market cap still exceeds the combined total of the next nine automakers.
And its price-to-earnings (P/E) ratio? An eye-watering 129 — compared to an industry average of just 6, as reported by Daily KOS.
That suggests the market still sees Tesla not as a car company but as a tech giant in disguise.
But that valuation requires faith in the company. What happens if that faith cracks?
Tech Stock or Car Company? Wall Street Isn't Sure Anymore
For years, Tesla's sky-high valuation rested on the promise that it wasn't just selling cars — it was changing the world. Robotaxis, humanoid robots, and full self-driving — Musk made huge promises that helped make Tesla bigger than life.
But as of now, 90% of Tesla's revenue still comes from car sales, not tech services or autonomy.
And even loyal analysts are starting to ask tough questions about whether those promises will ever materialize. As Daily KOS reports, some analysts warn that if Tesla were priced like a normal carmaker, its stock could be worth as little as 5% of its current value — putting shares closer to $13 than $260.
Even a more generous blended valuation — somewhere between a tech firm and a traditional automaker — would suggest the stock should be trading at around $37. That's still an 82% drop from current levels.
Adding to the potential obstacles is that the company's world-famous CEO is quickly becoming infamous.
Falling Sales, Rising Rivals
Musk's signature swagger hasn't stopped a chilling fact: Tesla's core business is shrinking. After years of surging sales, Tesla reported its first-ever global decline in 2024. And early 2025 data shows more of the same.
In China, the world's biggest EV market, Tesla shipments dropped 49% year-over-year. Meanwhile, sales cratered 76% in Germany, as reported by CNN.
In France, they're down another 26% after a 60% decline in January alone, according to PBS.
The cause? It's not just competition. It's Musk.
His political entanglements, particularly his close alignment with U.S. President Donald Trump and support for far-right parties in Europe, have sparked a fierce consumer backlash. Protests at dealerships, vandalism of Tesla vehicles, and online campaigns like "Tesla Takedown" are pushing would-be buyers to look elsewhere.
Musk's political affiliations are possibly causing Tesla to be tangled up in an unforeseen crisis of brand damage.
For years, buying a Tesla meant you were forward-thinking, climate-conscious, and maybe even cool. Now, for many, it signals something else — a political stance. Liberal and moderate EV buyers are walking away, and though Musk has picked up fans on the right, many don't actually want electric vehicles.
This brand damage is colliding with growing competition. China's BYD and Xiaomi are offering electric vehicles at a fraction of the price of Teslas — and now, with faster-charging technology and expanded charging networks.
Tesla once stood alone. Now, it's being flanked — and outpaced — on every side.
How Low Can It Go?
That's the billion — or $100 billion — question.
If Tesla can successfully launch its promised budget Model Y using cheaper LFP battery tech, it may regain some lost ground in China and price-conscious markets. But that rollout is still in early stages. And Musk's pivot from affordable mass-market EVs to unproven robotaxis only adds to investor skepticism.
In the meantime, Tesla remains the world's most valuable automaker — but the question is whether they can stay king.
References: Gravity may be finally catching up to Elon Musk as Tesla stock tumbles | The 10 Most Valuable Car Companies | What is Tesla worth? | Elon Musk is winning Republican fans. Can Tesla win them over, too? | Musk's embrace of right-wing politics risks alienating customers and sinking Tesla's stock | Tesla's stock defied gravity for years. Is Elon Musk’s EV party over?
