Tesla’s postelection romp now a lot less impressive
Gains of more than 90% in the immediate aftermath of Trump’s victory have largely been lost.
With the end of the trading day coming into view, Tesla is on track for its second-worst daily drop of the year.
The decline, ostensibly triggered by a sharp drop in Tesla sales in Europe, underscores the reversal in the share price of the electric vehicle maker in the aftermath of the US presidential election.
Tesla shares were part of an idiosyncratic pack of stocks — along with Palantir and taser maker Axon — that exploded in the aftermath of Trump’s victory in the US presidential election on November 5, 2024, as such stocks were thought likely to benefit in some way from their alignment with some aspects of Trump’s political agenda.
After the election, the stock was up more than 90% at one point, but since then those gains have been pared to just 20%.
Some would-be Tesla buyers are seemingly a bit turned off by CEO Elon Musk’s immersion in right-wing politics in both the US and Europe; investors may likewise be leery.
The stock price gyrations of the electric vehicle maker continue to be a more closely tied to crypto, an asset that famously lacks fundamentals, than the US stock market. Over the past three months, the correlation of weekly returns for Tesla and the S&P 500 is 41%. For Tesla and bitcoin, that’s sitting at 52%.
