By rikififi90 
The U.S. stock markets kicked off the week with sharp declines, and Tesla, led by Elon Musk, stood out as a major loser. On Monday, March 10, the electric carmaker’s shares plunged over 15%, wiping out all the gains accumulated since Donald Trump’s election in November last year. The company, once valued at $1.5 trillion in December, closed the trading session at $714.6 billion, reflecting a staggering 52.4% drop in market value over three months. This collapse stems from a mix of weaker-than-expected sales, uncertainties surrounding robotaxis, and Musk’s controversial political involvement, which has alienated investors.
Tesla’s downfall unfolded against a broader backdrop of instability on Wall Street. The S&P 500, encompassing America’s 500 largest companies, posted its steepest single-day drop since December 18, falling 2.7%, while the tech-heavy Nasdaq tumbled 4%, marking its worst daily performance since September 2022. The sell-off was driven by tech giants, often dubbed the “Magnificent Seven,” with Tesla leading the pack alongside Nvidia, Alphabet, and Meta, all hit by global economic concerns.
The optimism that followed Trump’s victory, when Tesla shares soared 91% in a matter of days, has given way to skepticism. Investors, who once hailed Musk as a visionary set to transform Tesla into a powerhouse of artificial intelligence and autonomous transport, are now questioning whether his bold promises will materialize. Meanwhile, Trump’s aggressive tariff policies and the strengthening Japanese yen add further layers of uncertainty to the financial landscape.
Tesla’s historic devaluation
Steep decline erases months of gains
In just three months, Tesla has shed more than half its market value, marking the steepest decline among the world’s leading automakers. After peaking at $1.5 trillion on December 17, following Trump’s election, the company’s shares have crumbled. The March 10 trading session was a turning point, with a daily drop exceeding 15%—the worst since 2020. Analysts attribute this crisis to a sharp decline in electric vehicle sales, particularly in China, where deliveries fell nearly 50% in February compared to the previous year.
The fallout goes beyond financial statements. Investor confidence, which once propped up Tesla’s lofty valuation, is faltering. Unlike competitors such as General Motors or Ford, whose market value largely hinges on vehicle production, roughly 75% of Tesla’s worth is tied to future expectations, including the rollout of robotaxis and autonomous technology breakthroughs. Yet, tangible progress on these fronts remains elusive. The Cybercab, a prototype autonomous taxi unveiled in October 2024, has yet to move beyond the concept stage, and the promise of a functioning fleet feels increasingly distant.
Musk’s role as a senior advisor to Trump, spearheading mass layoffs of U.S. government employees and shaping economic policy, has also raised eyebrows. Investors worry that his focus is drifting from Tesla, his primary wealth driver. Falling profits, consumer boycotts over Musk’s political stances, and a lack of fresh product updates have fueled the growing unease in the market.
Tech sector takes a hit
Tesla wasn’t alone in its struggles this Monday. The S&P 500’s technology sector dropped 4.4%, leading losses across the index’s 11 main segments. Giants like Nvidia, down 5%, and Alphabet, Amazon, and Meta, each off by nearly 5%, followed suit. This shift reflects a broader pivot among investors, who are moving away from high-risk stocks toward safer bets like government bonds and defensive sectors such as energy and utilities, which saw milder declines or even gains on the day.
Global factors amplified the downturn. The strengthening Japanese yen, spurred by expectations of interest rate hikes in Japan, triggered a unwind of the carry trade—a strategy where investors borrow in low-interest currencies like the yen to invest in higher-yielding assets like U.S. stocks. As this capital flow reversed, tech stocks, including Tesla’s, bore the brunt of the pressure.
Robotaxis and delayed promises
Cybercab: innovation or mirage?
Unveiled with fanfare in October 2024, the Cybercab was touted by Elon Musk as the future of urban mobility. The vehicle, devoid of steering wheels or pedals, is designed to operate as a fully autonomous taxi, bookable via an app, with owners able to profit by renting out their cars. At the Los Angeles event, Musk also showcased the robovan, an autonomous shuttle for up to 20 passengers, and the humanoid robot Optimus, underscoring his vision of blending AI with daily life. The pitch was bold: position Tesla as the leader of a mobility services revolution.
Five months later, the project remains stalled at the prototype phase. Tesla has floated plans for a free autonomous taxi service in California, but no firm launch date has been set. Meanwhile, rivals like Waymo, partnered with Uber, are already testing robotaxis in cities like Austin, piling pressure on Tesla. The delay in delivering on promises made nearly a decade ago—since Musk first teased fully autonomous vehicles in 2016—has analysts doubting the feasibility of his roadmap. Tesla’s forward price-to-earnings ratio, a measure of stock price relative to expected earnings, stands at 88, far above the S&P 500’s average of 21, hinting at an optimism that may be fading.
Key milestones in the Cybercab saga include:
- 2016: Musk pledges fully autonomous vehicles within two years.
- October 2024: Cybercab unveiled in Los Angeles.
- February 2025: Free California service announced, date TBD.
- March 2025: Delays and uncertainty cloud market outlook.
Timeline of Tesla’s crisis
Tesla’s recent journey mirrors a rollercoaster of hype and disappointment. Trump’s election in November last year sparked a 91% surge in shares, fueled by Musk’s ties to the president and bets on lighter regulation for autonomous tech. By December, market value hit its zenith. Since then, reality has set in. February saw a steep decline kick off, with weak China sales and no updates on affordable models. March cemented the collapse, with the March 10 session erasing all post-election gains.
Markets on edge
Wall Street reels from Trump’s tariffs
Beyond Tesla’s internal woes, U.S. markets are grappling with Donald Trump’s policy moves. Tariffs rolled out in March on Canada, Mexico, and China have stoked fears of a global trade war. The Dow Jones shed 890 points on March 10, a 2.1% drop, while the S&P 500 lost 2.7%. Financial and industrial sectors, vulnerable to trade tensions, saw heavy declines, with banks like JPMorgan Chase and Citigroup falling over 1%. The specter of retaliation from affected nations only heightens the uncertainty.
The auto industry, Tesla included, feels the ripple effects. A temporary pause on car tariffs from Canada and Mexico, announced March 5, offered little relief. German manufacturers like Volkswagen, with plants in Mexico, also took hits, signaling a broader sectoral strain. For Tesla, reliant on global supply chains and markets like China, tariffs pose an added threat to already squeezed profit margins.
Global factors worsen the picture
The rising Japanese yen and climbing yields on Japan’s sovereign bonds are pivotal in today’s financial puzzle. These shifts unraveled the carry trade, denting the tech sector’s reliance on foreign capital to sustain high valuations. Thomas Hayes, chairman of Great Hill Capital, noted that Japanese yields are at levels unseen since 2008, a red flag for global markets. Meanwhile, U.S. economic data—like February’s addition of just 77,000 private-sector jobs against expectations of 140,000—bolsters fears of a slowdown.
Tesla faces an even tougher road. On March 6, the company said it would stop taking custom orders for Model S and X in Japan after April 1, shifting to inventory and used cars. The move underscores Tesla’s weak foothold in Japan, where Musk has bemoaned its lag behind brands like Mercedes and BMW. With global sales slipping and rivals like BYD and General Motors gaining ground, Tesla is at a crossroads.
The U.S. stock markets kicked off the week with sharp declines, and Tesla, led by Elon Musk, stood out as a major loser. On Monday, March 10, the electric carmaker’s shares plunged over 15%, wiping out all the gains accumulated since Donald Trump’s election in November last year. The company, once valued at $1.5 trillion in December, closed the trading session at $714.6 billion, reflecting a staggering 52.4% drop in market value over three months. This collapse stems from a mix of weaker-than-expected sales, uncertainties surrounding robotaxis, and Musk’s controversial political involvement, which has alienated investors.
Tesla’s downfall unfolded against a broader backdrop of instability on Wall Street. The S&P 500, encompassing America’s 500 largest companies, posted its steepest single-day drop since December 18, falling 2.7%, while the tech-heavy Nasdaq tumbled 4%, marking its worst daily performance since September 2022. The sell-off was driven by tech giants, often dubbed the “Magnificent Seven,” with Tesla leading the pack alongside Nvidia, Alphabet, and Meta, all hit by global economic concerns.
The optimism that followed Trump’s victory, when Tesla shares soared 91% in a matter of days, has given way to skepticism. Investors, who once hailed Musk as a visionary set to transform Tesla into a powerhouse of artificial intelligence and autonomous transport, are now questioning whether his bold promises will materialize. Meanwhile, Trump’s aggressive tariff policies and the strengthening Japanese yen add further layers of uncertainty to the financial landscape.
Tesla’s historic devaluation
Steep decline erases months of gains
In just three months, Tesla has shed more than half its market value, marking the steepest decline among the world’s leading automakers. After peaking at $1.5 trillion on December 17, following Trump’s election, the company’s shares have crumbled. The March 10 trading session was a turning point, with a daily drop exceeding 15%—the worst since 2020. Analysts attribute this crisis to a sharp decline in electric vehicle sales, particularly in China, where deliveries fell nearly 50% in February compared to the previous year.
The fallout goes beyond financial statements. Investor confidence, which once propped up Tesla’s lofty valuation, is faltering. Unlike competitors such as General Motors or Ford, whose market value largely hinges on vehicle production, roughly 75% of Tesla’s worth is tied to future expectations, including the rollout of robotaxis and autonomous technology breakthroughs. Yet, tangible progress on these fronts remains elusive. The Cybercab, a prototype autonomous taxi unveiled in October 2024, has yet to move beyond the concept stage, and the promise of a functioning fleet feels increasingly distant.
Musk’s role as a senior advisor to Trump, spearheading mass layoffs of U.S. government employees and shaping economic policy, has also raised eyebrows. Investors worry that his focus is drifting from Tesla, his primary wealth driver. Falling profits, consumer boycotts over Musk’s political stances, and a lack of fresh product updates have fueled the growing unease in the market.
Tech sector takes a hit
Tesla wasn’t alone in its struggles this Monday. The S&P 500’s technology sector dropped 4.4%, leading losses across the index’s 11 main segments. Giants like Nvidia, down 5%, and Alphabet, Amazon, and Meta, each off by nearly 5%, followed suit. This shift reflects a broader pivot among investors, who are moving away from high-risk stocks toward safer bets like government bonds and defensive sectors such as energy and utilities, which saw milder declines or even gains on the day.
Global factors amplified the downturn. The strengthening Japanese yen, spurred by expectations of interest rate hikes in Japan, triggered a unwind of the carry trade—a strategy where investors borrow in low-interest currencies like the yen to invest in higher-yielding assets like U.S. stocks. As this capital flow reversed, tech stocks, including Tesla’s, bore the brunt of the pressure.
Robotaxis and delayed promises
Cybercab: innovation or mirage?
Unveiled with fanfare in October 2024, the Cybercab was touted by Elon Musk as the future of urban mobility. The vehicle, devoid of steering wheels or pedals, is designed to operate as a fully autonomous taxi, bookable via an app, with owners able to profit by renting out their cars. At the Los Angeles event, Musk also showcased the robovan, an autonomous shuttle for up to 20 passengers, and the humanoid robot Optimus, underscoring his vision of blending AI with daily life. The pitch was bold: position Tesla as the leader of a mobility services revolution.
Five months later, the project remains stalled at the prototype phase. Tesla has floated plans for a free autonomous taxi service in California, but no firm launch date has been set. Meanwhile, rivals like Waymo, partnered with Uber, are already testing robotaxis in cities like Austin, piling pressure on Tesla. The delay in delivering on promises made nearly a decade ago—since Musk first teased fully autonomous vehicles in 2016—has analysts doubting the feasibility of his roadmap. Tesla’s forward price-to-earnings ratio, a measure of stock price relative to expected earnings, stands at 88, far above the S&P 500’s average of 21, hinting at an optimism that may be fading.
Key milestones in the Cybercab saga include:
- 2016: Musk pledges fully autonomous vehicles within two years.
- October 2024: Cybercab unveiled in Los Angeles.
- February 2025: Free California service announced, date TBD.
- March 2025: Delays and uncertainty cloud market outlook.
Timeline of Tesla’s crisis
Tesla’s recent journey mirrors a rollercoaster of hype and disappointment. Trump’s election in November last year sparked a 91% surge in shares, fueled by Musk’s ties to the president and bets on lighter regulation for autonomous tech. By December, market value hit its zenith. Since then, reality has set in. February saw a steep decline kick off, with weak China sales and no updates on affordable models. March cemented the collapse, with the March 10 session erasing all post-election gains.
Markets on edge
Wall Street reels from Trump’s tariffs
Beyond Tesla’s internal woes, U.S. markets are grappling with Donald Trump’s policy moves. Tariffs rolled out in March on Canada, Mexico, and China have stoked fears of a global trade war. The Dow Jones shed 890 points on March 10, a 2.1% drop, while the S&P 500 lost 2.7%. Financial and industrial sectors, vulnerable to trade tensions, saw heavy declines, with banks like JPMorgan Chase and Citigroup falling over 1%. The specter of retaliation from affected nations only heightens the uncertainty.
The auto industry, Tesla included, feels the ripple effects. A temporary pause on car tariffs from Canada and Mexico, announced March 5, offered little relief. German manufacturers like Volkswagen, with plants in Mexico, also took hits, signaling a broader sectoral strain. For Tesla, reliant on global supply chains and markets like China, tariffs pose an added threat to already squeezed profit margins.
Global factors worsen the picture
The rising Japanese yen and climbing yields on Japan’s sovereign bonds are pivotal in today’s financial puzzle. These shifts unraveled the carry trade, denting the tech sector’s reliance on foreign capital to sustain high valuations. Thomas Hayes, chairman of Great Hill Capital, noted that Japanese yields are at levels unseen since 2008, a red flag for global markets. Meanwhile, U.S. economic data—like February’s addition of just 77,000 private-sector jobs against expectations of 140,000—bolsters fears of a slowdown.
Tesla faces an even tougher road. On March 6, the company said it would stop taking custom orders for Model S and X in Japan after April 1, shifting to inventory and used cars. The move underscores Tesla’s weak foothold in Japan, where Musk has bemoaned its lag behind brands like Mercedes and BMW. With global sales slipping and rivals like BYD and General Motors gaining ground, Tesla is at a crossroads.
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