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Starting with a disclaimer, there’s no denying that political discourse in this country is highly divided. There’s also no getting around the fact that the Department of Government Efficiency (DOGE) is endemic of that divide.
I’m not a pollster nor do I pretend to be, but I think it’s safe to assume that if a polling firm conducted a survey of a 1,000 people – 500 Democrats and 500 Republicans – more than 90% of the former would voice opposition to DOGE while a comparable percentage of the latter would sound a supportive tone.
As anyone that spends even a modest amount of time consuming traditional media or on social media knows, DOGE is overseen by Tesla (NASDAQ: TSLA) CEO Elon Musk and that’s been a drag on the electric vehicle maker’s shares. The stock had a post-election high north of $488. Based on last Friday’s close of $249.98, it’d have to nearly double to reclaim those highs.
That’s confirmation Tesla investors (and now former owners and potential buyers) are voting with their wallets and their voting against Musk’s involvement with DOGE and his ties to the Trump Administration. Whether they’re right or wrong to act that way is a debate for another forum at another time, but it cannot be argued that they’re affecting Tesla’s share price and other market participants are concerned.
Investors See Musk’s Political Moves as Negative
Confirming the headwinds currently facing Tesla stock are the findings in a survey conducted by Morgan Stanley analyst Adam Jonas who covers the company. His survey of 245 market participants found that 85% have “negative” or “extremely negative” views on Musk’s involvement with politics. Conversely, just 12% viewed Musk getting involved with politics as “insignificant” and an even smaller 3% viewed it as positive.
To be fair, politics isn’t the sole reason why shares of Tesla have recently been drubbed. Arguably, a fair amount of the stock’s recent shellacking is attributable to being concerned about Musk being spread too thin. Prior to taking on leadership of DOGE, he was running an expansive list of companies, including Tesla. There’s only 24 hours in a day and Tesla investors, rightfully so, are wondering if Musk fully has his eye on that ball.
He acknowledged the difficulties in having a lot on his plate in a March 10 interview with Fox Business. That day, Tesla tumbled 15%, marking its worst intraday performance since 2020. Still, it’s hard to ignore that politics are affecting the stock and doing so in negative fashion.
“Jonas also asked about expectations for the company’s performance. In a separate question, 59% said they anticipated Tesla would deliver fewer cars to customers in 2025 compared with the prior year. What’s more, 21% of total respondents said they expected a decline of more than 10%. That comes as some analysts have raised alarm that recent reports of vandalism could spook potential customers,” reports CNBC.
Maybe Some Hope for Tesla Stock
At the moment, Tesla stock is a freight train heading downhill or a falling knife. Whichever market euphemism an investor chooses, the point is Tesla is a risky near-term bet and hope isn’t a valid investment strategy.
If one opts to bank on hope as a tonic for Tesla’s woes, it could come in the form of markets more fully recognizing that electric vehicle ownership isn’t as left-leaning as it’s perceived to be. Then again, that information isn’t a secret and simply because one person a certain a certain political persuasion sells a Tesla that doesn’t mean there’s one that votes the other way to go buy a new one.
Short of Musk stepping back from DOGE sometime soon, Tesla bulls are likely forced to latch onto longer-ranging themes such as robotaxis and artificial intelligence (AI) advancements as potential catalysts.