Tesla Stock Crash and Investor Concerns: A Growing Crisis

Tesla’s Stock Plummets, Investors Worry About Elon Musk’s Focus

Tesla’s stock has suffered a dramatic crash in recent months, dropping 55% from its mid-December high. The decline has been further accelerated by a 15% single-day drop in early March, marking the company’s biggest plunge since September 2020. As the tech-heavy Nasdaq index also fell 4%, Tesla’s struggles have become increasingly evident. Investors are growing increasingly concerned about CEO Elon Musk’s commitment to the company, as his attention appears to be divided between Tesla and his various other ventures, including DOGE (a governmental overhaul initiative) and other businesses like SpaceX, X, xAI, and Neuralink. Musk’s absence from Tesla’s day-to-day operations has become a central issue, with many analysts and shareholders expressing frustration over his perceived lack of focus.

Musk’s Divided Attention: DOGE and Beyond

Elon Musk has been spending significant time in Washington, D.C., overseeing a cost-cutting government initiative called DOGE. During his time away from Tesla, the company’s stock has slid each of the past seven weeks. Analysts and investors have pointed out that Musk, who once slept on the factory floor during challenging times at Tesla, is now reportedly sleeping on the floor of his DOGE government office. In a recent interview, Musk acknowledged the "great difficulty" of managing his multiple business ventures alongside his political endeavors. With Musk juggling roles at Tesla, SpaceX, X, xAI, Neuralink, and even finding time for gaming and raising his large family, many fear his divided attention is taking a toll on Tesla’s performance.

Declining Vehicle Sales Add to Tesla’s Woes

Another major factor contributing to Tesla’s struggles is plummeting vehicle sales in key markets like Europe and China. Investors have been left with little to be excited about as the company’s financial performance continues to suffer. The combination of Musk’s perceived distraction and slowing sales has created a perfect storm of challenges for Tesla. While the company was once seen as a pioneer in the electric vehicle (EV) industry, its recent struggles have raised questions about its future trajectory and ability to maintain its competitive edge.

Investor Dissatisfaction Reaches a Boiling Point

The frustration among Tesla investors is palpable. A recent unscientific poll on the retail stock-trading platform StockTwits asked whether Musk’s focus on DOGE was hurting Tesla. About 60% of respondents said "Yes – Tesla needs his focus," while 25% dismissed the idea as media hype, and 15% blamed other factors. Garrett Nelson, a senior equity analyst at CFRA Research, summed up the sentiment: "We think shareholders have legitimate concerns about Elon Musk being spread too thin, and it’s become clear he’s now spending more time on DOGE than anything else." Nelson believes Musk’s focus on DOGE is unlikely to wane until mid-2026 and recommends elevating a senior manager to take on additional responsibilities to keep Tesla on track.

The Catch-22 of Musk’s Leadership

Despite the growing calls for Musk to step back, analysts warn that his departure could also harm Tesla’s value. Musk’s presence is believed to account for a significant portion of the company’s valuation. Dan Ives of Wedbush Securities estimates that "about $150 to $200 per share" of Tesla’s stock price is tied to Musk’s leadership. While some, like longtime Tesla investor Ross Gerber, argue that Musk should step down entirely to allow someone else to steer the company, others believe Musk’s continued involvement is crucial. Gerber told Business Insider that Musk has damaged Tesla’s brand and that the company needs a less political leader to restore its image.

A Divided Wall Street: Analysts Weigh In on Tesla’s Future

Dan Ives remains bullish on Tesla, insisting that Musk will remain CEO for at least the next five to seven years. He believes the company’s future hinges on its autonomous and robotics developments rather than EV sales. "Many times over the last 15 years, Musk has been counted out and so has Tesla, and we view this as no different," Ives said. However, not all analysts share Ives’ optimism. Garrett Nelson and Ross Gerber have raised concerns about Musk’s divided attention and the potential long-term consequences for Tesla’s brand and financial performance. As the company navigates this challenging period, one thing is clear: Tesla’s future is deeply tied to Musk’s ability to balance his myriad responsibilities while keeping the company on track.