Tesla plunges 16% as calls grow for Musk to step down

Tesla drops nearly 16% amid rising backlash against Musk

Tesla shares fell almost 16% in a single trading session, with the slump concentrated in the final hour, and the punishment did not come alone. The S&P 500 lost 3.25% and the Nasdaq dropped more than 4%, entering correction territory, while the ten-year US Treasury yield rose by half a point. Meanwhile, Elon Musk warned of an imminent "massive cyberattack" on X and its AI Grok, with widespread failures in both systems. The coincidence of these two fronts—financial and technological—has turned the day into a referendum on Musk himself.

From $220 to $400 and back again

The most repeated argument explaining the crash is political rather than technical. According to circulating calculations, the stock jumped from $220 to $400 after Trump's electoral victory, without any other justification, and now returns to where it was or lower. With sales figures and forecasts on the table, the current price assumes Tesla can sell between 8 and 10 million cars annually with profits at current prices. Reality shows 1.8 million units and falling.

Some go further, arguing that Tesla should trade between $30 and $40, and everything else is inflated expectation. The money Musk borrowed to buy Twitter is financed by Tesla shares, adding structural risk: if X collapses, the effect spreads to the company. Annual power filings sent to the SEC show Musk owns 23.5% of shares and contemplate a 3-for-1 split.

Why does Tesla fall if Musk has 16 companies?

The short answer is that Musk's business diversification does not protect Tesla shareholders. The plunge is explained by a combination of factors that, according to some participants, Musk himself has acknowledged: the brand is suffering because it has insulted potential buyers. US Democrats, Europeans, and Chinese buyers—the three natural markets for electric vehicles—have been publicly disdained. Those with money for a Tesla buy an Audi or Mercedes in Europe, and in China they buy domestic brands.

The most optimistic calculation assumes the company regains traction with new models; the pessimistic scenario starts from the premise that market share will continue to fall in favor of Chinese manufacturers. Between both, a fact admits no interpretation: Tesla sells to US Democrats, European leftists, and Chinese consumers, and has insulted all three groups.

Musk's political activism and brand boycott

The boycott is not the sole cause, but it points toward the abyss. Some scratch Teslas, attack dealerships, and put stickers on cars. The brand also carries a narrative problem: for years it sold itself as eco-resilient, and now many potential buyers feel deceived by their owner's political turn. You couldn't have known, some joke ironically.

The debate over the boycott has an uncomfortable edge: in Europe, those paying the price are German plant workers, not the owner. Musk's political activism has consequences for jobs that did not participate in it. This tension between punishing the owner and not harming workers runs through much of the discussion.

Musk's role: he won't leave nor be ousted

Calls for Musk to exit Tesla clash with stubborn shareholder reality. He is the majority shareholder by far: even if he leaves the CEO position, he will still direct the company whether investors like it or not. To get rid of him, one would have to buy his 23.5% stake at whatever price he considers necessary and agrees to sign. Without that, resignation requests are just tantrums.

Musk doesn't care, some argue, not because he has 16 companies, but because the US treasury will cover his holes. That's what happens when the US president eats out of your hand. The limit would be set by other actors in the presidential circle who, according to this reading, are fed up with Musk.

Starlink, X, and SpaceX: the domino effect

The crash is not limited to Tesla. Starlink fell nearly 20%, X is under scrutiny due to failures acknowledged by Musk himself, and SpaceX does not escape the climate either. The most aggressive reading celebrates the entire empire collapsing. The cautious one reminds us that the stock market has been falling for nearly two weeks and today's drop was general, not just Tesla.

The one-year chart is devastating. Anyone looking only at today's session misses the full picture: the rise from 2020 to 2021, from €20 to €400, occurred when Musk was not friends with Trump. The correlation between politics and stock price is not as clean as some want to sell.

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With these elements, the question is not whether Tesla is worth its market cap, but how much of its price is technology and how much is the story of a man who refuses to stay silent. The market has just issued its verdict on the latter.