Elon Musk, the visionary entrepreneur behind Tesla and SpaceX, has long been a polarizing figure in the world of business. While his ventures have revolutionized the electric vehicle (EV) industry, they have also often been overshadowed by his larger-than-life persona and controversial actions.

Recently, however, it seems that Musk's latest push for influence in Washington, D.C. has failed to help his primary asset—Tesla—keep its momentum, with the company's stock taking a significant hit in recent months.

Tesla's stock has dropped over 40% since January, wiping out the "Trump bump" that had seen it soar by more than 90% following the 2020 election. Musk, whose net worth is largely tied to Tesla stock, has seen a staggering $121 billion evaporate from his wealth in just three months.

The decline in Tesla’s market value is in stark contrast to the high expectations set by Musk’s increasing influence in the corridors of power. Despite the momentum he gained with his high-profile role in political discourse and media, Tesla’s business is facing severe challenges that even Musk’s power grab in D.C. couldn’t fix.

So, what happened? Why has Musk’s rapid rise to political prominence not been able to save his “baby” (as President Trump referred to Tesla during a bizarre joint press event on the South Lawn last week)?

The answer, it seems, lies in two key factors: declining Tesla sales and Musk’s inability—or unwillingness—to address these problems.

One of the main reasons for Tesla’s troubled stock is the sharp decline in global vehicle sales. After years of experiencing robust growth, Tesla’s numbers have started to falter.

In recent months, the company has faced difficulty meeting its ambitious sales targets, particularly in key markets like China and Europe, where competition from traditional automakers and new EV startups has intensified.

A combination of factors has contributed to this decline. First, the global chip shortage continues to impact production, making it harder for Tesla to manufacture vehicles at its usual pace.

Second, Tesla has faced increasing pressure from rivals like General Motors, Ford, and Volkswagen, which are ramping up their own electric vehicle offerings. These companies are not only leveraging their established brands but also investing heavily in EV technology, making it harder for Tesla to maintain its dominant market position.

Moreover, while Tesla was once seen as the undisputed leader in the EV market, that title is now under threat. Traditional automakers are offering more affordable and competitive electric vehicles that are appealing to a broader range of consumers.

These competitors are able to leverage their established production and distribution networks to roll out electric models at a scale that Tesla can’t quite match.

As sales slow down, investors have become more cautious. The once sky-high expectations for Tesla’s growth are now facing the reality of a much more competitive marketplace. While the company still leads the way in EV technology, it is no longer the only game in town, and that’s reflected in the stock price.

While Tesla’s sales problems are mounting, Musk’s attention appears to be diverted elsewhere. In recent months, the Tesla CEO has been preoccupied with his endeavors in Washington, D.C., attempting to flex his political muscle and gain favor with federal policymakers.

Musk has been vocal about his political stances, frequently engaging in public debates, and seeking influence in various political circles.

However, these political pursuits have come at the expense of Tesla’s core business. As Musk spends more time navigating the complexities of D.C., his focus on Tesla’s day-to-day operations seems to be diminishing.

At a time when Tesla could use strong leadership to weather the storm of declining sales and increasing competition, Musk’s attention appears split between his political ambitions and his responsibilities as the head of Tesla.

For a company that has been built on the promise of innovation and cutting-edge technology, the lack of leadership on the business front is evident. Investors are looking for signs that Tesla can maintain its market dominance, but Musk’s focus on external matters has created an air of uncertainty surrounding the company’s future.

Rather than addressing the challenges Tesla is facing in production and sales, Musk seems more focused on his public persona and his influence over the political landscape.

Before the stock crash in early 2022, Tesla had experienced a significant rise in market value following the 2020 U.S. presidential election. Investors were hopeful that Musk’s growing prominence as a business and media mogul would be a boon for the company.

With the Republican Party, and especially former President Donald Trump, expressing admiration for Musk, the "Trump bump" lifted Tesla's stock to new heights.

However, this euphoria proved short-lived. The market quickly realized that the political connection could not overcome the fundamental business issues Tesla was facing.

Despite Trump’s public endorsement, Tesla’s long-term prospects depend on its ability to adapt to changing market dynamics, not on political alliances. The stock’s decline illustrates that investors are starting to look beyond the surface-level hype and focusing on the reality of the business.

The "Trump bump" may have given Tesla a temporary boost, but it has become increasingly clear that political favor is no substitute for strong business performance. Tesla’s struggles in sales, combined with Musk’s distraction, have made it harder for the company to maintain the momentum it once enjoyed.

Tesla is at a crossroads. Musk’s political influence, which once seemed like an asset, now appears to be a liability for the company. While it’s impossible to ignore the vast fortune that Musk has created with Tesla, his focus on D.C. may ultimately prove to be a distraction that costs the company dearly in the long run.

If Musk is serious about turning things around for Tesla, he will need to refocus on the company’s core business and address the challenges that have been holding back growth. This means focusing on improving production, expanding into new markets, and countering the growing competition in the EV space.

Investors, meanwhile, are likely to remain cautious until they see tangible results. Until Tesla’s sales problems are addressed and Musk re-engages with his primary business, the company will continue to face an uphill battle.

Whether Musk can successfully balance his political pursuits with his role at Tesla will determine the company’s future trajectory.

Musk’s recent foray into the political realm has undoubtedly drawn attention, but it has not been enough to shield Tesla from the challenges it faces. The combination of declining sales, increasing competition, and Musk’s apparent lack of focus on his core business has led to a significant dip in Tesla’s stock price.

While political connections and power grabs may offer temporary boosts, they are no match for the fundamental issues that impact a company’s bottom line.

As investors reassess their positions, the future of Tesla—and Musk’s wealth—depends on his ability to refocus on what made the company great: innovation, leadership, and a commitment to delivering value to customers. Until then, Tesla’s stock will likely remain volatile, with its prospects uncertain.