Tesla's stock nosedives — wiping out $700B in gains since Trump's election victory

Core Viewpoint - Tesla's stock has experienced a significant decline, erasing $700 billion in gains since the US presidential election, with shares down over 28% in the last month and nearly 32% since the beginning of the year [1][8]. Company Performance - Following Donald Trump's election victory, Tesla initially thrived due to expectations of benefits from CEO Musk's ties to the president, but these hopes have diminished due to concerns over the company's core business of car sales [2][3]. - A January report indicated that Tesla's quarterly sales had fallen for the first time in a decade, and the company is losing market dominance in Europe and China [3][4]. - Bank of America analyst John Murphy downgraded Tesla's price target from $490 to $380, citing sluggish new car sales and uncertainty regarding the robotaxi initiative [7]. Market Environment - The speculative excitement that drove Tesla's stock to highs post-election has faded amid concerns about US trade policy and economic growth, with the S&P 500 down over 7% from its peak [6]. - Tesla's forward price-to-earnings ratio remains high at 88, compared to the S&P 500's multiple of 21, indicating that the shares are still considered expensive [9]. Potential Recovery Catalysts - Possible catalysts for a recovery include improving sales figures, updates on the robotaxi initiative, or a resurgence in investor appetite for riskier equities [8].