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Elon Musk asks Tesla employees to ‘hang onto’ stock despite 40% drop

Elon Musk asks Tesla employees to ‘hang onto’ stock despite 40% drop

  • 21.03.2025 05:47
  • hindustantimes.com
  • Keywords: Stock Drop, Protest, Vandalism, Political Backlash

Elon Musk urged Tesla employees to hold onto their stock despite its 40% drop this year. The company faces backlash due to protests, vandalism, FBI investigations, and reduced shipments in key markets like Europe and China.

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Estimated market influence

Tesla

Tesla

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Analyst rating: Neutral

Stock price dropped over 40% this year; facing protests and vandalism due to CEO's political involvement; production halted for Model Y refresh; FBI investigating incidents.

Context

Business Insights and Market Implications

Key Facts and Data Points:

  • Tesla stock drop: Tesla shares have fallen over 40% this year, erasing gains from a previous surge following President Trump's inauguration.
  • Protests and vandalism: Tesla has faced headline-grabbing protests and vandalism in recent weeks, driven by backlash against CEO Elon Musk's role in the Trump administration's efforts to cut federal spending.
  • FBI investigation: The U.S. Federal Bureau of Investigation (FBI) is investigating incidents of Tesla charging stations and dealerships being vandalized, including fires started in Las Vegas, Kansas City, and Missouri.
  • Sales slowdown: Shipments have dropped in key markets like Europe and China, amid political pushback against Musk.
  • Production halt: Tesla paused production of its most popular Model Y line earlier this year to prepare for a refreshed version.

Market Trends and Business Impact:

  • The sharp decline in Tesla stock prices reflects investor concerns over the company's stability and growth prospects.
  • The surge in protests and vandalism indicates growing consumer backlash against Musk's political affiliations, potentially harming Tesla's brand reputation.
  • Slowing sales in critical markets like Europe and China could weaken Tesla's competitive position in the global EV market.

Competitive Dynamics:

  • Competitors like BYD, NIO, and traditional automakers may capitalize on Tesla's weakened position to gain market share.
  • The pause in Model Y production highlights potential supply chain or operational challenges, raising questions about Tesla's ability to meet demand.

Strategic Considerations:

  • Musk's call for employees to "hang onto" stock suggests confidence in Tesla's long-term prospects but may also signal internal concerns about employee morale and retention.
  • The company may need to reassess its strategy to address both operational challenges (e.g., production halts) and external pressures (e.g., political backlash).

Long-Term Effects:

  • The ongoing backlash against Musk could have lasting damage to Tesla's brand image, particularly among environmentally conscious consumers.
  • Regulatory scrutiny or changes in government policies related to electric vehicles may further impact the company's operations.

Regulatory Implications:

  • While not explicitly mentioned, the FBI's investigation into vandalism cases raises concerns about potential legal and regulatory challenges for Tesla facilities globally.