At what point in the Tesla market crash will Elon Musk have to break up with Trump?

Eccentric billionaire Elon Musk tied Tesla to his own identity, and for many years, that worked. But now, the company’s image is tangled in President Donald Trump’s second term as the two become the most powerful duo in Washington.

Customers are leaving, investors are panicking, and Tesla’s value has plunged 35% this year alone, so we couldn’t help but wonder: how far will the company fall before Elon is forced to choose between Trump and Tesla?

The numbers tell the story. In 2022, 22% of car shoppers said they would consider a Tesla. By last summer, that number sank to 7%, putting the brand on the same level as Lincoln and Dodge. And it’s getting worse. 63% of buyers now say they would never even consider a Tesla, up 10 percentage points from last year.

Tesla’s sales are falling fast

Elon’s political shift is driving away buyers. Tesla used to dominate liberal markets like Los Angeles, San Francisco, and New York. Now, sales in those areas are collapsing.

At the same time, conservatives are more interested than ever, but they aren’t making up for the loss. The percentage of Republicans considering a Tesla jumped from 15% to 26%, while Democratic interest fell from 23% to 13%. The problem? Many conservative buyers still hesitate to go electric, leaving Tesla’s bottom line in purgatory.

The backlash is visible. Protesters have been showing up at Tesla showrooms across the U.S. and Europe after Elon backed a far-right political party in Germany and called for mass firings of government employees.

Some Tesla stores and supercharger stations have even been vandalized, with graffiti and swastikas appearing at multiple locations.

The damage isn’t just political. Tesla’s lineup is aging, and competition is catching up. New electric models from rival automakers are offering better technology, battery range, and aggressive pricing.

Quality issues are piling up and resale values are plummeting, according to Tesla’s own earnings report from Q4 2024.

Tesla’s crash is global

The Tesla freefall isn’t just in the U.S.—it’s worldwide. In Germany, new registrations dropped 76.3% in February. In France, sales fell 26%. Over in China, Tesla delivered 30,688 new cars in February, down 49% from last year.

The official explanation is that buyers are waiting for the refreshed Model Y, but industry analysts aren’t convinced.

“When you play politics, there is always a risk,” said Felipe Munoz, an analyst at JATO Dynamics. Germany, one of Tesla’s biggest overseas markets, has seen some of the worst declines. Elon’s political statements are costing him customers, and analysts warn the damage won’t be easy to reverse.

Even in the U.S., the numbers are grim. Tesla sales dropped 7% in 2024, and the first two months of 2025 show another 2% decline. Meanwhile, the rest of the EV market grew by 25% last year. Other automakers are seeing gains while Tesla is losing ground.

Tesla’s stock is in freefall

The stock market is reacting. Since Trump’s inauguration in January, Tesla’s market cap has dropped by $742 billion. The stock is down 38% from its peak. Investors who once saw Elon’s ties to Trump as an advantage are now rethinking their positions.

By Wednesday’s close, Tesla was trading at 89 times this year’s projected earnings. That’s more than double the valuation of trillion-dollar tech giants and three times the multiple of Nvidia, despite the fact that Nvidia is expected to grow revenue by 57% this year, compared to 15% for Tesla.

Even that 15% growth isn’t guaranteed. UBS analyst Joseph Spak slashed his Tesla forecast, now predicting a 4% revenue drop in 2025. His research points to “softer demand” and a buyers’ strike over negative brand sentiment.

Still, some analysts think Tesla’s stock will bounce back—but not because of car sales. Morgan Stanley analyst Adam Jonas is betting on Tesla’s AI and robotics division.

In a recent report, Jonas said, “The buyers’ strike from negative brand sentiment is weighing on near-term sales.” But he kept his Tesla price target at $430—72% higher than today’s stock price—because of the company’s potential in AI and self-driving technology.

The problem? Tesla isn’t selling AI yet. Right now, it’s still a car company and car buyers are walking away.

At some point, Elon will have to make a choice: stay with Trump and risk Tesla’s future, or cut ties and try to win back the customers he lost. Right now, the market is deciding for him.

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