What Tesla's Tarnish Tells Us About America Inc

Elon Musk's company, like the US itself, seems like a sell.

- Rana Foroohar

Of all the Trump trades to hit the skids, Tesla stands out.

The share price of billionaire Elon Musk's electric vehicle (EV) company has plummeted from a post-US-election high of nearly US$480 to less than US$282 last week. The fall has been so precipitous that on Feb 27, the American Federation of Teachers (AFT), a US union representing members with US$4 trillion (S$5.38 trillion) in retirement investments, called on six large money managers — BlackRock, Vanguard, State Street, T. Rowe Price, Fidelity and TIAA — to reconsider their position in the company.

As AFT president Randi Weingarten put it, Tesla stock has been sinking "faster than a Cybertruck in quicksand", with European sales in particular falling off a cliff. The company's latest financial statements show a 23 per cent year-on-year decrease in operating income, with gross profit margins slipping 138 basis points in the fourth quarter.

Sales in California — a key market for EVs — fell 8 per cent in the fourth quarter of 2024, according to vehicle registrations released by the California New Car Dealers Association. Of course, that's nothing compared with the nearly 60 per cent January year-on-year sales dip reported in Germany.

Some of the backlash is political. Gestures that look like Nazi salutes don't go down well with Europeans, nor do calls to dismantle the US Department of Education resonate with teachers.