There are few business figures who are as well known as Tesla (NASDAQ:TSLA) CEO Elon Musk. One can make a very strong argument that Musk’s energetic leadership, business acumen, deep pockets, and bravado have propelled the company to become one of the largest EV manufacturers in the world.
Musk, of course, is also a close associate of the current president, which likely played a role in TSLA’s strong surge at the end of 2024. Over the last two months of the year, shares skyrocketed nearly 60%, fueled by investor optimism that Musk’s relationship with the president-elect could unlock significant advantages in the new administration.
Now, just six weeks into Trump 2.0, Musk remains front and center – but not always in ways that investors might find reassuring. Instead of focusing solely on Tesla, he’s taken on a high-profile role overseeing the Department of Government Efficiency (DOGE). With sweeping cuts to federal departments and agencies, DOGE has quickly become a political lightning rod. And as its most visible architect, Musk – along with the companies he’s linked to – is facing intense scrutiny.
The market is taking notice. TSLA shares have plunged ~31% in 2025, and top investor Eugenio Catone warns the worst may not be over. With Musk splitting his time between government shake-ups and corporate leadership, Tesla’s stock could have more turbulence ahead.
“Elon Musk’s political involvement, particularly his support for Trump, is alienating potential customers and causing reputational damage to Tesla globally,” asserts the 5-star investor, who is among the top 4% of TipRanks’ stock pros.
The fallout is already visible. Tesla dealerships have been vandalized, anti-Musk stickers are plastered on cars, European sales cratered 45% in January, and a Canadian MP – who’s eyeing the Prime Minister’s seat – is openly pushing for a 100% tariff on Tesla imports.
“Vandalism and protests against Tesla are intensifying, reflecting widespread disappointment and potentially impacting TSLA sales and investor confidence,” Catone added.
The situation is spiraling quickly, and Tesla’s global reputation hangs in the balance. The company has already struggled to maintain its once-explosive growth, but now, according to the investor, it risks losing the one factor that has kept its stock from an all-out collapse: investor faith in Elon Musk.
Seeing further downside, Catone rates Tesla shares a Sell. (To watch Catone’s track record, click here)
Wall Street is not quite ready to jump ship, however. With 13 Buy, 12 Hold, and 10 Sell ratings, TSLA holds a Hold (i.e. Neutral) consensus rating. Its 12-month average price target of $346.72 represents ~24% upside for the year ahead. (See TSLA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.