Overview
Tesla's shares (NASDAQ: TSLA) have experienced a decline following a public dispute between CEO Elon Musk and former President Donald Trump. This incident comes at a time when Tesla is also facing significant challenges in its European sales market.
Current Stock Performance
The stock has recently tested the $300 level, with additional support around $292 from an April resistance level. This price point is critical; a failure to maintain above these levels could lead to further declines in the stock price.
Musk and Trump's Dispute
Elon Musk criticized Trump's new spending bill, labeling it as "insane." In response, Trump threatened to end government subsidies for Tesla and made a controversial remark about deporting Musk to South Africa, where he was born. This exchange has been described by analysts as a "soap opera" that negatively impacts Tesla's stock.
Since 2010, Tesla has received approximately $30 billion in federal support, which has become a focal point in the ongoing feud. Trump remarked on social media that without these subsidies, Musk might have to "close up shop."
Sales Struggles in Europe
In addition to the fallout with Trump, Tesla is grappling with a sharp decline in sales across Europe. Recent data indicates that Tesla registrations fell by 61.5% in Denmark and 64.4% in Sweden last month. This downturn is particularly concerning as Europe represents Tesla's second-largest market and is crucial for future demand in the electric vehicle (EV) sector.
To address these challenges, Musk has reportedly taken direct control of European sales following the dismissal of Omead Afshar, the former vice president of manufacturing and operations. The sales slump is exacerbated by increasing competition from both European and Chinese EV manufacturers.
Market Sentiment and Future Outlook
The current bearish sentiment surrounding Tesla's stock is evident, and the company must demonstrate a recovery from these levels to avoid the $300 price point becoming a resistance level that could lead to further losses. The stock remains highly sensitive to Musk's public actions and statements, with recent volatility reflecting the impact of his political engagements.
Analysts suggest that Tesla may need to announce new initiatives or strategies to regain investor confidence and restore its previous market standing.