Shares of US electric carmaker Tesla plunged by more than 15% on Monday, erasing all the gains made following the US presidential election in November.
The sharp decline followed a lowered delivery forecast from an analyst, which further pressured the stock price.
Tesla boss Elon Musk has become a close ally of US President Donald Trump during the presidential election campaign.
After Trump’s win, Tesla’s stock price soared, peaking in mid-December when it was worth roughly twice as much as on election day in early November. However, since then, the price has steadily declined, with the slide accelerating in recent weeks.
Tesla ended 2024 with its first drop in deliveries in more than a decade, despite Musk’s earlier predictions for growth.
The tech billionaire has kept investors interested by promising future business in self-driving cars and humanoid robots, even though it’s still unclear if Tesla will succeed in these areas.
Investors have continued to value the company highly, far exceeding the valuations of traditional automakers.
In mid-December, Tesla’s market capitalization reached more than $1.5 trillion, with shares trading around $480. But as of Monday, the stock price had fallen to about $222, bringing Tesla’s market cap down to around $715 billion.
In comparison, US car giants Ford and General Motors are worth $40 billion and $48 billion, respectively.
Musk’s personal wealth is closely tied to Tesla’s stock price.
He often uses his Tesla shares to secure loans. A large drop in Tesla’s stock could create financial problems for Musk, as these loans may require extra collateral if the stock price falls too low.
The financial service Bloomberg estimates his net worth at around $300 billion, making him, on paper, the world’s richest person.
Following Trump’s election victory, some market observers speculated that Musk’s close relationship with the US president could give Tesla an edge.
Trump appointed Musk as a cost-cutter for the US government, granting him broad powers. However, Trump said that no conflicts of interest would arise.
