Tesla CEO Elon Musk Plans Another Year With Trump: Retail Braces For More Pain As Stock Hits 5-Month Low

Tesla shares tumbled over 15% on Monday, marking their worst drop in over four years and hitting their lowest since mid-October. The sell-off continued after hours, driven by broader market weakness and CEO Elon Musk's latest remarks.

Musk told Fox Business that he was managing his businesses "with great difficulty" while leading efforts to "make government more efficient, eliminate waste and fraud" as part of President Donald Trump's Department of Government Efficiency (DOGE). 

Tesla has now erased all gains from Trump's election victory in November when investors bet Musk's ties to the president would benefit the EV maker. The stock is down nearly 54% from the all-time high that it touched on Dec. 17, 2024, a few weeks after Trump’s victory.

Musk also said he expects to remain in the Trump administration for another year, saying, "Unless we're stopped, we will get to $1 trillion of savings."

Retail traders on Stocktwits, where Tesla has over a million followers, have already voiced frustration over Musk's distractions. 

Sentiment remained 'extremely bearish' at Monday's close amid message volume spiking by more than 600%. 

"Imagine spending $120,000 on a Cybertruck and not being able to drive it due to the humiliation, being flipped off, yelled at, etc," said one user, referring to the alleged brand damage from Musk's actions.

"This is a punishment for Elon Musk from Tesla shareholders worldwide … Bringing business into politics. This is the result: destroying the company," said another, rekindling controversy over Musk's controversial one-arm salute at a Trump victory rally months ago.

Musk, however, sought to reassure investors on X, stating that Tesla stock "will be fine long-term." 

He also shared a screenshot of a Truth Social post from Trump, in which the president praised Musk for "putting it on the line in order to help our nation" and criticized "Radical Left Lunatics" for allegedly attempting to "collusively" boycott Tesla. Trump added that he would show his support by purchasing a "brand new Tesla."

Even Tesla's most bullish analysts believe that his far-right politics have alienated customers globally.

Adding to concerns, Bloomberg reported that Musk is set to be questioned under oath on Apr. 3 in an investor lawsuit alleging his 2022 Twitter buyout flip-flop was a ploy to manipulate the stock price.

Analysts remain split on Tesla's outlook.

On Monday, UBS cut its Tesla price target to $225 from $259 and kept a 'Sell' rating, saying it now expects 367,000 deliveries for the first quarter, down from a prior estimate of 437,000, and flagged signs of weak demand based on short wait times for the Model 3 and Model Y in key markets.

In contrast, Morgan Stanley maintained an 'Overweight' rating with a $430 price target, calling Tesla an "embodied AI compounder" and viewing the pullback as a buying opportunity. 

Wedbush analyst Dan Ives admitted that Musk's DOGE distractions and brand controversies have "created a black cloud" over the stock.

"However, if every time we threw in the white towel on the Tesla name when it got hot in the kitchen, we would have missed one of the most transformational growth stories in modern history," he added.

For updates and corrections, email newsroom[at]stocktwits[dot]com.