Trump Pledges to Buy Tesla Amid Stock Market Turmoil
US President Donald Trump has announced plans to buy a brand-new Tesla, following a significant 15% drop in the electric carmaker’s share price.
Trump blamed the decline on "radical left lunatics" who, he claimed, were boycotting Tesla in an attempt to harm Elon Musk. However, financial analysts pointed to other factors, including concerns about Tesla’s production targets, a decline in sales, and growing investor unease over Trump’s own economic policies on tariffs.
On Monday, US stock markets suffered a major sell-off as investors worried about the economic consequences of Trump’s tariffs. The president had previously suggested in a TV interview that the US economy was in a "period of transition," sparking fears of a potential recession.
Tech Stocks Take a Hit
As part of the broader market decline, technology stocks saw a steep drop, with Tesla losing 15.4%. Other major companies, including Nvidia, Meta (Facebook’s parent company), Amazon, and Alphabet (Google’s parent company), also experienced significant losses.
Tesla’s stock rebounded slightly on Tuesday, rising 3.6%, alongside other recovering tech shares.
The initial drop was triggered by a UBS analyst report warning that Tesla’s vehicle deliveries could fall well below expectations this year.
Trump Calls for Support as Tesla Faces Challenges
In response to the downturn, Trump took to Truth Social, urging Republicans, Conservatives, and all great Americans to support Musk. This comes as Musk has been actively involved in slashing federal government jobs through the Department of Government Efficiency (Doge)—a non-official entity aiming to cut federal spending.
Despite his vocal support for Musk, Trump’s policy decisions have not favored the electric vehicle industry. He revoked a 2021 Biden order that aimed to make 50% of US car sales electric by 2030 and halted federal funds for charging stations.
Furthermore, Tesla’s chief financial officer, Vaibhav Taneja, warned in January that Trump’s tariffs could negatively impact Tesla, as many of its parts are sourced from Canada and Mexico. These levies, he said, could hurt profitability.
Trump, however, continued to praise Musk, calling him a "truly great American" while accusing left-wing activists of "illegally and collusively boycotting Tesla."
"I'm going to buy a brand-new Tesla tomorrow morning as a show of confidence and support for Elon Musk," Trump declared.
Tesla's Struggles Go Beyond Politics
While Musk’s political stance has drawn criticism—leading to protests at Tesla dealerships in Portland, Oregon, and New York City—market analysts believe Tesla’s stock decline is largely due to financial challenges rather than political factors.
Linsay James, an investment strategist at Quilter Investors, acknowledged that Musk’s political views have had "a brand impact", but emphasized that the drop in Tesla's value was ultimately based on hard data.
"When we look at new orders, for example, in Europe and China, they’ve effectively halved over the last year," she said.
Sales in Europe have seen a sharp decline, plunging 45% in January 2025 compared to the same month in 2024, according to the European Automobile Manufacturers' Association (ACEA). Meanwhile, Tesla sales in China and Australia have also experienced a steep drop.
Additionally, market experts believe that Tesla’s previous high valuation made it vulnerable to corrections, while rising competition from Chinese electric vehicle manufacturers is adding further pressure.
With broader economic slowdown fears growing, high-priced stocks like Tesla have been among the hardest hit in recent days.
Concerns Over Musk’s Focus
Investors have also expressed concerns about Musk’s ability to juggle multiple ventures. In a Fox Business interview on Monday, Musk admitted he was balancing his Tesla leadership with his Doge responsibilities "with great difficulty."
Beyond Tesla, Musk’s other businesses have also faced challenges:
- SpaceX suffered two major failures in recent Starship rocket launches.
- X (formerly Twitter) experienced a major outage on Monday.
Despite these setbacks, Musk remains a central figure in both the business and political spheres—leaving Tesla investors questioning whether the company’s current struggles are just a temporary slump or the start of a longer-term decline.
