Tesla’s Post-Election Rally Hits a Speed Bump
After a remarkable surge following the US presidential election, Tesla’s shares took a sharp turn downward on Friday, with investors seemingly cashing in on their profits. As of early morning trading, the electric car maker’s stock had dropped nearly 5%, extending losses from earlier in the week.
A Brief Respite from a Blistering Rally
Despite this recent dip, Tesla’s shares are still up an impressive 65% since November 5, the night of the US presidential vote. The company’s CEO, Elon Musk, has been a key beneficiary of the election outcome, thanks to his close ties with President-elect Trump. Musk was appointed to co-lead the newly formed Department of Government Efficiency, a presidential advisory commission.
Musk’s Ties to Trump
Musk was a major supporter of Trump during the election campaign, contributing $277 million to the Republican’s effort. As the world’s richest person, with a net worth of $439.4 billion, Musk’s influence extends far beyond the automotive industry.
Regulatory Framework for Self-Driving Vehicles
Last month, reports emerged that Trump’s transition team was planning to establish a federal framework for regulating self-driving vehicles. If true, this move would provide a significant boost to Tesla, which is staking its future on the development of autonomous vehicles.
Tesla’s Autonomous Ambitions
At the company’s “We Robot” event in October, Musk unveiled the Cybercab self-driving concept car. While Tesla has yet to deliver on its promise of truly autonomous vehicles, its Autopilot and paid “Full Self-Driving” services continue to advance the technology.
European Sales Slump
In other news, data from the European Automobile Manufacturers Association revealed a 40.9% decline in Tesla car sales in November, outpacing the overall 9.5% drop in battery electric car sales in the region.
Recall Notice
Tesla also announced a recall of nearly 700,000 vehicles in the US due to an issue with its tire pressure monitoring system. Fortunately, software-related recalls are typically not a major concern for the company, as they can be addressed through “over-the-air” updates.
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