Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Electric Vehicles

Tesla’s Post-Election Stock Bump Has Vaporized

Can Musk pull another market miracle out of his MAGA hat?

A Tesla logo as a graph arrow.
Heatmap Illustration/Getty Images

It’s long been clear that Elon Musk’s primary talent is not dreaming up electric cars, reusable rockets, or tunnel-boring machines. It is reshaping reality in a way that always seems to keep Tesla’s stock price high, which made him the world’s richest man.

That stock price has been taking a beating of late. A groundswell of Tesla resentment has arisen since Musk hitched his wagon to Donald Trump and began dismantling the American government. Public rage has taken the form of protests, vandalized Superchargers, and, most importantly to the man himself, sliding sales of Tesla vehicles. All of this has combined to send the company’s market value tumbling this year, to the delight of Musk-haters everywhere eager to see his net worth implode. Its share price has fallen more than 5% today alone.

Even so, Musk carries on as Trump’s right-hand man as if his fortunes are immune from Tesla’s ups and downs. Could this time be different?

Tesla saw plenty of dark times during its march to EV dominance, such as the notorious “manufacturing hell” needed to bring the Model 3 to fruition. Likewise, there have been plenty of times when Tesla’s soaring stock valuation appeared to be untethered from its business reality — it became the world’s most valuable automaker while building only a tiny fraction as many cars as Toyota or General Motors.

The difference in those days was that Tesla — current profits and losses aside — was clearly on the rise. Overcoming that manufacturing problem, for example, allowed the EV-maker to build lots and lots of Model 3s and Model Ys and put it on the path to worldwide electric car dominance. Today that upward trajectory is not so clear. Tesla sales in the U.S. plateaued last year even before Elon’s misadventures with MAGA. This year, sales in Europe and Australia are in freefall, seemingly in response to Musk’s embrace of the far right. Tesla is down 71% this quarter in Germany and Australia.

It would be easier for Tesla to cast this dip as a blip if something new and exciting were waiting right over the horizon. But the only new vehicle to arrive since 2020 is the Cybertruck, the metallic embodiment of Musk’s conversion on the road to Mar-a-Lago. The brand’s biggest hope for improving sales is the recently revealed redesign of the Model Y, code-named “Juniper,” which follows a similar update to the Model 3.

The company’s future is pegged not to any new EV with widespread appeal, but rather to the notion that Tesla will solve autonomous driving and dominate the next automotive era with its Cybercab and similar self-driving vehicles. Whether Musk will actually win the future is beside the point. What it achieves in the present is freeing Musk from being judged on hard sales numbers like an ordinary car company CEO and keeping him in the character of visionary innovator, able to keep his stock price afloat through his own genius.

That doesn’t mean Musk can dismiss the power of dollars and cents with a wave of his hand. Investors are once again furious with the CEO for taking a ketamine-powered journey into the abyss rather than trying to build Tesla’s business in a practical way. And even if he can keep their anger at bay, a sales tumble really is a multi-pronged problem for Tesla.

For one thing, Musk’s political machinations have cost him all the market gains he earned via Trump’s electoral victory. Tesla’s valuation soared from around $800 billion to $1.5 trillion in December, when it became clear the CEO would become the president-elect’s right hand man. Since that moment, the company’s value has fallen by more than $600 million, effectively erasing the bump in Tesla’s market cap.

Still, Tesla — and Musk by extension — remains incredibly valuable. The carmaker’s true concern is that a big drop in sales could be a double-whammy for Tesla revenue. Recall that the company’s most reliable revenue stream is not really its sales of electric cars, but rather the carbon credits generated by those EVs under California’s auto emissions regulatory scheme, which it can sell to other automakers who’ve yet to meet their emissions targets. Even as Tesla’s reputation foundered in 2024, its revenue stream from selling credits reached $2.76 billion, up 50% from 2023.

That stream of free money helps to stabilize Tesla’s balance sheet in times of trouble. It is not inevitable. If automakers like Stellantis got their act together and started to sell a high volume of low-emissions vehicles, they’d need to buy fewer credits from Tesla. Tesla’s tumbling sales in the wake of Musk’s antics could reduce the amount of credits it could sell to others, since the credits are tied to sales of low-emissions vehicles. And it’s not out of the question that Musk’s political ally, President Trump, could attack the carbon market as part of his offensive against EVs, which could eliminate this revenue stream for Tesla. (If this seems unlikely, consider that Musk pursued this alliance knowing full well that Trump campaigned on eliminating federal tax credits for EVs that benefit Tesla buyers.)

Even with this dire financial picture, it’d be foolish to bet against Musk. The man has overcome more harrowing market conditions — and that was before America’s unelected chief consultant managed to entrench himself as Hand of the King. But seeing his supply of easy money wither because of his political stances might be just the thing to hit the man where it hurts.

Red

You’re out of free articles.

Subscribe today to experience Heatmap’s expert analysis 
of climate change, clean energy, and sustainability.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Climate

AM Briefing: The Greenpeace Verdict

On Energy Transfer’s legal win, battery storage, and the Cybertruck

The Greenpeace Verdict Is In
Heatmap Illustration/Getty Images

Current conditions: Red flag warnings are in place for much of Florida • Spain is bracing for extreme rainfall from Storm Martinho, the fourth named storm in less than two weeks • Today marks the vernal equinox, or the first day of spring.

THE TOP FIVE

1. Jury sides with pipeline company in Greenpeace lawsuit

A jury has ordered Greenpeace to pay more than $660 million in damages to one of the country’s largest fossil fuel infrastructure companies after finding the environmental group liable for defamation, conspiracy, and physical damages at the Dakota Access Pipeline. Greenpeace participated in large protests, some violent and disruptive, at the pipeline in 2016, though it has maintained that its involvement was insignificant and came at the request of the local Standing Rock Sioux Tribe. The project eventually went ahead and is operational today, but Texas-based Energy Transfer sued the environmental organization, accusing it of inciting the uprising and encouraging violence. “We should all be concerned about the future of the First Amendment, and lawsuits like this aimed at destroying our rights to peaceful protest and free speech,” said Deepa Padmanabha, senior legal counsel for Greenpeace USA. The group said it plans to appeal.

Keep reading...Show less
Yellow
Fusion.
Heatmap Illustration/Getty Images, Thea Energy

Thea Energy, one of the newer entrants into the red-hot fusion energy space, raised $20 million last year as investors took a bet on the physics behind the company’s novel approach to creating magnetic fields. Today, in a paper being submitted for peer review, Thea announced that its theoretical science actually works in the real world. The company’s CEO, Brian Berzin, told me that Thea achieved this milestone “quicker and for less capital than we thought,” something that’s rare in an industry long-mocked for perpetually being 30 years away.

Thea is building a stellarator fusion reactor, which typically looks like a twisted version of the more common donut-shaped tokamak. But as Berzin explained to me, Thea’s stellarator is designed to be simpler to manufacture than the industry standard. “We don’t like high tech stuff,” Berzin told me — a statement that sounds equally anathema to industry norms as the idea of a fusion project running ahead of schedule. “We like stuff that can be stamped and forged and have simple manufacturing processes.”

Keep reading...Show less
Yellow
Electric Vehicles

Why BYD Keeps Shocking the World

The Chinese carmaker says it can charge EVs in 5 minutes. Can America ever catch up?

The BYD logo as a rabbit.
Heatmap Illustration/Getty Images

The Chinese automaker BYD might have cracked one of the toughest problems in electric cars.

On Tuesday, BYD unveiled its new “Super e-Platform,” a new standard electronic base for its vehicles that it says will allow incredibly fast charging — enabling its vehicles to add as much as 249 miles of range in just five minutes. That’s made possible because of a 1,000-volt architecture and what BYD describes as matching charging capability, which could theoretically add nearly one mile of range every second.

Keep reading...Show less