Over the past year, Tesla (NASDAQ:TSLA) stock’s taken a backseat in Elon Musk’s mind. Since publicly endorsing Donald Trump’s Presidential campaign on 13 June 2024, the billionaire has devoted considerable energy to political priorities and less on electric vehicles (EVs).
That might be about to change. Refocusing his attention to business, Musk recently pledged to spend less money on politics. He still plans on being Tesla’s boss in five years’ time.
So how has Tesla stock performed since its CEO’s foray into the political arena? And what does the future hold for the world’s most valuable EV company?
Friends in high places
Having a close association with the US President would usually be an asset for any CEO. That was the opinion of many Tesla investors immediately after Trump’s victory. In the six weeks following the election, the firm’s share price almost doubled to $488.54.
Sentiment’s since cooled amid shareholder concern over Musk’s political statements and his controversial role in the Department for Government Efficiency (DOGE). Tesla shares are currently changing hands at $334.62. They’re down 9% in 2025.
Nonetheless, investors who put £10,000 into the business when Musk endorsed Trump would have made a substantial gain. With that sum, they’d have been able to buy 70 shares.
Today, that position would be worth £17,484.98, accounting for currency exchange rate fluctuations — a huge return of around 75%!
Brand damage
Despite impressive gains, the jury’s still out on whether Musk’s actions have hurt Tesla stock’s long-term future. Even prominent backers, such as ARK Invest‘s Cathie Wood, acknowledge the carmaker’s brand has suffered. This poses a risk to investors.
At the extreme end, the company’s showrooms have attracted ‘Tesla takedown’ protests and dealerships have been vandalised. Mainstream consumers are shunning the firm too, with sales plummeting to a three-year low of less than 337,000 EVs in Q1 of 2025.
Musk’s keen to repair the harm to Tesla’s public image. His pullback from the limelight and a renewed focus on the business he’s headed since 2008 are telling signs that damage control efforts are underway.
Where next for Tesla?
Intensifying competition in the EV sector’s another challenge for Tesla. The business hopes a new robotaxi trial in Austin, Texas, due to start in June, could be the answer to its current problems.
There are significant regulatory hurdles to overcome and other companies, such as Alphabet‘s Waymo, have stolen a march on Musk’s business in the driverless cab space. Tesla’s preparing for mass production of its CyberCab in 2026.
The optics of the firm’s robotaxi launch, which only involves 10-20 vehicles, will be critical. There’s little room for error considering Tesla stock’s valuation sits at an eyewatering forward price-to-earnings (P/E) multiple above 156.
Nevertheless, Musk doesn’t lack ambition. He’s promised “hundreds of thousands” of self-driving Teslas will be on American roads within 18 months. This could be a gamechanger for the Tesla share price, but there are significant execution risks.
The stock’s still worth considering despite recent difficulties. I’ll continue to hold my small shareholding. As this watershed moment for the company approaches, it’s reassuring that Musk plans to spend more time in the boardroom and less in the Oval Office.
