Tesla Stock On Its Last Legs All Because Of Elon Musk?
Tesla's stock market value has dropped by a staggering 65%; however, it's not indicative that the company is on its last legs, it has more to do with the auto industry as a whole, new EV completion, and its CEO's questionable antics.
Tesla, once a stock market darling, has taken a huge fall from grace. The automaker’s shares have lost a tremendous amount of value, sinking by approximately 65% over the course of 2022. The causes range from its CEO Elon Musk’s frivolous Twitter purchase to industry factors like added EV competition.
When Elon Musk purchased Twitter, it didn’t serve to enhance or bolster his image in any way among his supporters, in particular, those with stakes in Tesla. In fact, it did quite the opposite. The way he handled the entire Twitter acquisition and how he continues to handle it now has been very revealing in terms of his actual character.
NPR touted musk as a “professional Twitter troll,” due to his petty reactions and sometimes abhorrently apparent right-wing bias. For instance, he removed journalists from the New York Times and Washington Post simply because he didn’t like what they tweeted. Both of those publications, while prestigious and well-respected in their reporting, tend to have left-leaning biases.
Not only does his quick suspension of those reporters look like the reaction of a 16-year-old, but they potentially reflect (not-so-subtly) Musk’s political preferences. That is just one example, but the effect of actions such as this was recorded in a poll conducted by Morning Consult. The poll examined Tesla’s favorability in the eyes of democrats versus republicans. It concluded that Tesla’s favorability declined by 20 points among democrats and increased by 4 points among those affiliated with the republican party.
Those results are significant because those with more left-leaning views are keener on purchasing and owning electric vehicles. So logically, a correlation can be extrapolated from this statistic. Simply put, Musk’s activities on Twitter are negatively influencing how potential Tesla buyers view him, which may be serving to inadvertently impact the company’s stock market performance.
That said, correlation does not equal causation. Still, it’s clear that many Tesla supporters who once thought positively of the CEO have changed their minds due to what’s going on over at Twitter since his takeover. Regardless of what’s happening at Twitter and how it is or isn’t affecting Tesla, there are various other mitigating factors that are.
Namely, the auto industry had a terrible year in 2022. Every single automaker took a hit at the stock market last year. Tesla is an automaker and, thus, was not exempt from these industry-wide blows.
Lastly, the EV market is growing, and it’s growing fast. This means that Tesla suddenly has to contend with viable competition, and that is an obstacle it has never had before. Almost every major automaker is coming out with its own attractive and highly capable EV models. The Ford F-150 Lighting, the Rivan R1T and R1S, and the very affordable Chevy Volt are just a few that come to mind.
Ultimately, the big picture for Tesla is that 2022 threw it some curveballs, whether they were self-inflicted or not. That doesn’t mean the company is going anywhere, though. It was still able to move 1.3 million units in 2022, and as the EV industry grows and becomes more mainstream, its reach, too, will grow with it.
Really what it comes down to is that the company is not on its last legs, it’s just going through some growing pains. And honestly, perhaps, its CEO is, too.
