TL;DR

Tesla’s stock drop reflects deeper issues than just tariffs or new models. Musk’s political gamble and Tesla’s inflated valuation suggest a bubble on the verge of bursting.

Story

Tesla’s stock plunged nearly 6%, and it’s not just market jitters. European sales plummeted 40% in February—a chilling sign of things to come. While electric vehicle sales overall rose, Tesla’s stalled. Why? Let’s connect the dots.

Trump’s tariff threats spooked investors. Tariffs raise prices, making imported goods less competitive. This trade war hurts everyone, especially companies like Tesla relying on global supply chains.‣ Tariff: A tax on imported goods.

The Model Y refresh is a smokescreen. Blaming slow sales on anticipation for a new model ignores the elephant in the room: Elon Musk’s political baggage. His work with the Trump administration, advocating for spending cuts and privatization of social security, alienated a large customer base, particularly in Europe. ‣ Privatization: Transferring government services to private companies.

This isn’t just about cars; it’s about trust. Musk’s rhetoric turned customers away, impacting the brand. Remember the 2008 financial crisis? Blind faith in charismatic leaders led to disaster. Are we repeating history?

The real crisis? Tesla’s valuation. Compared to industry giants like VW or Toyota, Tesla’s sales and revenue are dwarfed, yet its market cap remains astronomical. This bubble is reminiscent of the dot-com crash.‣ Market Cap: Total value of a company’s shares. Are we witnessing the beginning of another painful correction?

Musk’s promises of robotaxis and full self-driving feel like desperate attempts to distract from fundamental problems. Remember Theranos? Hype can only mask reality for so long. ‣ Theranos: A healthcare company exposed for fraudulent blood-testing technology.

Tesla’s renaming of its “Full Self-Driving” system in China to “Intelligent Assisted Driving” speaks volumes. It’s an admission that the technology isn’t what it’s cracked up to be. This reminds me of Enron’s creative accounting – dressing up failure in fancy language.‣ Enron: An energy company that collapsed due to accounting fraud.

Advice

Don’t be swayed by hype or political grandstanding. Research company fundamentals and evaluate risks before investing. Remember Enron, Theranos, and the 2008 crisis.

Source

https://www.reddit.com/r/stocks/comments/1jko4ew/tesla_shares_drop_on_plunging_european_sales/