Tesla Shares Continue to Decline After Election Rally

Tesla electric vehicles are seen parked at the company’s Gigafactory in Berlin-Brandenburg.

Shares of Tesla have continued to fall, with a reported decline of 5% in premarket trading on Friday. This drop follows a rough week for the electric vehicle producer.

At approximately 6:30 a.m. ET on Friday, Tesla shares were down 5%, extending losses from earlier fluctuations throughout the week. On Wednesday, Tesla shares fell by 8%, marking their most significant drop since the time of Donald Trump’s election victory in November.

Following Trump’s presidential win, Tesla shares initially surged as investors anticipated that the electric vehicle company would benefit due to CEO Elon Musk’s close relationship with the president-elect. Musk was named co-leader of a newly established government advisory board, called the Department of Government Efficiency, often abbreviated as "DOGE." The name shares similarities with a popular internet meme that led to the rise of the cryptocurrency termed dogecoin.

After the announcement of this commission, the value of dogecoin experienced a brief increase.

Elon Musk was a significant supporter of Trump's campaign, contributing approximately $277 million mainly directed toward Trump’s election efforts, as reported by Federal Election Commission documents. Musk, who has a net worth estimated at $439.4 billion, is currently recognized as the richest person in the world.

Recently, Bloomberg News conveyed that Trump's transition team was exploring a national framework to regulate self-driving vehicles. If actualized, this framework could greatly enhance prospects for Tesla, which is heavily focused on the goal of deploying vast fleets of autonomous vehicles, popularly termed "robotaxi" services. During Tesla's "We Robot" event in October, Musk unveiled a self-driving concept vehicle called the Cybercab.

Despite these plans, Tesla has yet to deliver on Musk’s vision concerning fully autonomous vehicles. The current Autopilot and paid "Full Self-Driving" services still necessitate human oversight to manage the vehicle’s functions and intervene when required.

In additional Tesla-related updates, recent data from the European Automobile Manufacturers Association highlighted a staggering 40.9% decrease in Tesla car sales during November, which is notably greater than the overall decline of 9.5% recorded for battery electric vehicles (BEVs) across the region.

Tesla, Shares, Market