Tesla Stock Plummets to Shocking Lows, but Elon Musk Warns Investors: 'Buy Now, or Regret It Later'

Elon Musk, the wealthiest individual in the world, has found himself in a turbulent situation as his electric vehicle company, Tesla, faces a significant decline in stock price, triggered by a combination of external factors and internal challenges. Musk, who has long been a lightning rod for controversy due to his outspoken public persona and political involvement, recently spoke candidly about the impact of his role in the Trump administration and its effect on Tesla’s financial performance.

Despite these challenges, Musk remains confident in the long-term prospects of his company, suggesting that the current dip in stock price presents a “buying opportunity” for investors willing to look beyond the short-term volatility.

Tesla’s stock has taken a significant hit, dropping from a record high of $479.86 per share on December 17 to a closing price of $259.16 on Monday, marking a decrease of approximately 46% in just a few months. For a company that had been hailed as a market leader in the electric vehicle (EV) space, this steep decline is nothing short of alarming.

On Friday, Tesla shares closed at $263.55, down 3.51% for the day, and the following Monday saw an additional drop of $4.39, or 1.67%. For Musk, whose wealth is largely tied to Tesla stock, the plunge has been particularly painful, with his net worth dropping significantly along with the stock price.

Approximately one-third of Musk's $330 billion fortune is tied up in Tesla shares, and when the stock reached its peak, his net worth soared to a staggering $464 billion. The drop in stock value has clearly taken a toll on Musk’s personal wealth, but despite the financial setback, the billionaire remains steadfast in his belief that Tesla’s future is bright.

Musk himself addressed the factors contributing to Tesla's stock slump during a town hall in Green Bay, Wisconsin, where he spoke to a crowd of 2,000 supporters. Musk admitted that his involvement with the Trump administration and its controversial budget cuts and job losses has led to significant backlash, particularly from those who criticize his political affiliations.

Musk, who has served as a senior adviser and heads the Department of Government Efficiency, suggested that the political firestorm surrounding his activities is partly responsible for the erosion of Tesla’s stock value.

“They’re trying to put massive pressure on me, and Tesla, I guess, to stop doing this,” Musk explained. “My Tesla stock and the stock of everyone who holds Tesla has gone down roughly in half. I mean, it’s a big deal.” While acknowledging the impact of political pressure on his personal finances, Musk expressed optimism about Tesla’s long-term outlook.

Despite the immediate financial challenges, Musk remains bullish on Tesla’s future. At the rally, he reiterated his belief that Tesla stock will ultimately rebound, encouraging investors to take advantage of the current low prices.

“Long term, I think Tesla stock’s going to do fine, so maybe it’s a buying opportunity,” he said, presenting the drop as a potential moment to invest at a discounted price.

Musk’s comments reflect his unwavering confidence in Tesla's potential, even in the face of short-term setbacks. The company continues to lead the EV market, but recent signs of slowing growth—particularly a 45% decline in Tesla sales in Europe in January—have raised concerns among analysts.

Additionally, Tesla’s revenue for Q4 2024, which came in at $25.71 billion, fell short of the expected $27.26 billion, contributing to a sense of uncertainty among investors.

Several external factors have contributed to Tesla’s struggles, with the company facing both internal challenges and broader market trends. First, there are the mounting protests and vandalism at Tesla’s dealerships, particularly in locations such as Milwaukee and Madison in Wisconsin, where tensions have escalated due to Musk's political involvement.

These protests reflect broader discontent with Musk's public persona and leadership, further exacerbating the challenges faced by Tesla.

Moreover, Musk’s personal ventures, such as his leadership at the social media platform X and his work with SpaceX and xAI, have drawn attention away from Tesla, causing some to question his focus on the EV giant. In particular, the role of Musk in running multiple high-profile companies has led to concerns that he may not be dedicating sufficient time and attention to Tesla’s day-to-day operations, which could be impacting the company’s performance.

Analysts are divided on Tesla’s future prospects, with some expressing concerns about the company’s slowing growth. Dan Ives, a Wedbush Securities analyst, recently forecasted that Tesla would see a 7% drop in vehicle deliveries in the first quarter of 2024, compared to the previous year.

Ives attributes much of the decline to “anti-Musk” sentiment and broader brand issues. He also notes that Musk’s leadership style, which balances his responsibilities at Tesla with his work at other companies, may be contributing to the company’s struggles.

“Musk needs to better balance being CEO of Tesla and running DOGE with investors and employees yearning for Musk's leadership at this juncture,” Ives wrote in a research note, signaling that Musk’s attention may be stretched thin between his multiple ventures.

Despite the criticism, Musk’s confidence in Tesla’s future remains unshaken. The billionaire has used his public platform to encourage potential investors to view the current dip as a unique opportunity to buy Tesla stock at a relatively low price.

His message is clear: While Tesla may be facing short-term challenges, the company’s long-term prospects remain strong, and those who buy now will benefit in the future.

This message has resonated with some high-profile investors, including Commerce Secretary Howard Lutnick, who urged Americans to buy Tesla stock. "Buy Tesla," Lutnick said on Fox News. "It’s unbelievable that this guy’s stock is this cheap. It’ll never be this cheap again."

Lutnick’s endorsement of Tesla reflects the belief that the company’s setbacks are temporary and that the stock will eventually rebound. Musk’s own conviction, bolstered by his track record of defying expectations, only adds to the sense of optimism surrounding the company’s future.

Musk’s involvement in various ventures outside of Tesla, including SpaceX, xAI, and the Boring Company, has been a point of contention for some investors. While these companies have seen success in their own right, there are growing concerns that Musk’s attention is divided, with Tesla potentially losing out on the focus and leadership it needs to thrive.

In addition to his involvement with other companies, Musk’s recent move to sell X (formerly Twitter) to his artificial intelligence company, xAI, has raised questions about his priorities. The $33 billion all-stock transaction has fueled speculation about Musk’s commitment to Tesla and whether his other ventures are draining resources and attention from his flagship company.

As Tesla faces a critical period in its financial history, the company’s performance will have far-reaching consequences for Musk and his investors. The short-term declines in stock value, along with mounting external pressures, have created a climate of uncertainty.

However, Musk’s unwavering confidence in the company’s future offers a glimmer of hope for those looking to capitalize on the dip.

Tesla’s performance over the next few quarters will be a key indicator of whether Musk’s optimism is well-placed or if the company will continue to face challenges in a rapidly evolving marketplace. For now, Musk’s advice remains clear: “Buy now, or regret it later.”