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Roula Khalaf, editor of FT, chooses her favorite story in this weekly newsletter.
Of all Trump’s crafts to hit skaters, Tesla stands out. The price of Elona Musk’s company company for electric vehicles fell with a post-election maximum of almost $ 480 to less than $ 282 last week. The fall was so sudden that last Thursday the US Federation of Teachers, the American Union representing members with $ 4 in pension investments, invited six major money managers – Blackkock, Vanguard, State Street, T Rowe Price, Fidelity and Tia Rewind your position at the company.
As President Randi Wentbarten said, Tesla Stock sank “faster than Cybertruck in Quicksand,” and European sales fell off the cliff in particular. The latest financial statements of the company show 23 percent of the year to reduce operational revenue, and the gross margin of profit in the fourth quarter has reduced 138 base points.
Sales in California – the key electric vehicle market – fell 8 percent in the fourth quarter of 2024, according to the registrations of vehicles published by the Association of New Cars in California. Of course, this is nothing compared to nearly 60 percent of January on an annual sale in Germany.
Some of the return reactions are political. Gestures that look like Nazi greetings do not fall well with Europeans, nor do they invoke to dismantle the education department with teachers. But even if Musk himself was not so polarizing, the price of the company’s shares became “completely divorced from the basics”, as JPMORGAN analyzing it just a month ago. Furthermore, the reasons why Tesla’s brand got so stunned with a larger fall American Inc.
Just as Trump is overly produced by Underdelivers (remember lines about the prices that have fallen on his first month on duty?), So is Musk. Start with the fact that the Chinese Electric Vehicle Manufacturer surpassed 2024 sales assessments for almost 20 percent, even while Tesla reported on the first full year A drop in vehicle delivery Since 2011. This is the result of byd dramatically lowering their costs compared to rivals using vertical integration, ownership of supply chains (byd makes your batteries) and scale economy.
It is a magical formula for Chinese industrial policy – constant iteria on a scale increases productivity and decreases. State subsidies in areas such as electrical vehicles support the spread. But after Beden, the United States do not have industrial policy in pure technology. Trump ends federal support for the construction of filling cells, something that used Tesla massively, and will probably reduce tax incentives for electric vehicles. Musk may be able to attend cabinet meetings, but at the end of the day, large oil runs the Republican Party And Trump has no interest in supporting the transition of pure energy. This does not fight for an American company trying to make up for the Chinese national champion.
Tesla focused not on the price, but on top brand. It’s an Apple Strategy. But to collect a premium, you have to be considered as you have a certain splendor and cache on the market. Male political lunatics have devalued his brand in many parts of the world. Sales in Europe collapsed after announcing support for the German far right side of AFD.
Dutch pension fund discarded from Tesla in protest in early January. Tesla owners in France, Norway and the UK shoot the Bumper stickers in which they read: “I bought it before we knew that Elon was crazy.” In Germany, public protests in Tesla factories are common (I recently received a call for one in Brooklyn). All of this violated Tesla’s price and the value of its high -tech, sustainable brand. According to Stifel analyst Stephen Gengarou, Tesla’s net assessment of benefits, which measures the perception of consumer consumer, is close to lower low time.
Tesla’s decline mirrors a greater feeling that American exceptionality in capital, especially in technology, can be at the end. Some of this is all up to the firmer competition of China (Deepseek Surprise has led to a sharp correction in American artificial intelligence supplies) and reality that technology will unavoidably exclusively exclude companies from large markets. Tesla sales are lagging behind the overall growth of the market in China, where regulators have slowed to approve of Musk’s independent driving software. Considering the US-kine relationship policy, it is hard to imagine that Tesla will be able to move in front of competitors like Waymo in areas like autonomous cars.
Meanwhile, competitors at home and abroad are gathering to threaten Tesla’s leadership in EV infrastructure. Mercedes-Benz, BMW, GM, Stellantis, Honda, Hyundai, Kia and Toyota started ionna, a rival initiative to fill the US station in the US, which plans to deploy 30,000 stations by 2030. That, Aft says, “is a direct challenge for Tesla’s domination.”
Will the money managers listen to union calls to review their position in Tesla? I hope so. Men’s frequent announcements about ambitious projects that will allegedly transform the company (I do not bet the success of the humanoid robots outside Japan) have an air of recklessness. His controversial package is paid both obscene and unjustified. As AFT points out, one JPMORGAN analyst has a goal of $ 135 for Tesla. If the price price fell on it, the annual drop in price would reach 64 percent.
That would be a serious hit for investors. I would rank Tesla, like the USA these days, as a sale.
