Tesla plunges 36% in first quarter, worst performance for any period since 2022

Core Insights - Tesla's stock experienced a significant decline of 36% in the first quarter of 2025, marking its worst quarter since 2022 and the third-steepest drop in its 15 years on the public market [1][2][10] - The decline resulted in a loss of over $460 billion in market capitalization, with the majority of the quarter coinciding with Elon Musk's involvement in the Trump administration's efforts to reduce government spending and regulations [3][4] Financial Performance - The last comparable decline occurred at the end of 2022, when Tesla's stock fell by 54% due to Musk's sale of over $22 billion in shares to finance his acquisition of Twitter, now known as X [2] - Despite the recent drop, Tesla's stock has shown volatility in the past, with a 29% decline in the first quarter of 2024 followed by a 63% increase for the remainder of the year [10] Market Dynamics - Tesla faces challenges including a steep decline in new vehicle sales and pressure to deliver on promises regarding robotaxis, while competitors are gaining market share [8] - Musk's plans to launch a driverless ride-hailing service in Austin, Texas, by June 2025 have raised skepticism among analysts regarding the company's ability to meet this deadline [8][9] Government Influence - Musk's role in the White House, particularly in leading the Department of Government Efficiency (DOGE), has contributed to negative sentiment around Tesla's stock, alongside protests and boycotts against the company [4][7] - DOGE claims to have achieved $140 billion in federal spending reductions, which is less than one-third of Tesla's valuation loss in the first quarter [4][5] Future Outlook - Musk remains optimistic about Tesla's long-term prospects, suggesting that the current stock drop may present a buying opportunity for investors [10]