"Unusual Boycott Movement"... Tesla Missing Trump Effect Bet on by Seo-hak Gaemi [Business & Issues]

Stock Price Falls Below Level at Trump's Election
Anti-Musk Protests Spread Across Europe and the U.S.
Sharp Decline in EV Sales Threatens Carbon Credit Revenue

EPA Yonhap News

Tesla, long regarded as the top beneficiary of U.S. policy since the election of President Donald Trump, recently experienced a sharp decline in its stock price. Anti-Tesla rallies and boycott movements in Europe and the U.S. have dampened investor sentiment. The main cause of the boycott is interpreted as the growing backlash against CEO Elon Musk, who was appointed head of the U.S. Department of Government Efficiency (DOGE). Especially as electric vehicle sales in Europe have plummeted and concerns over reduced carbon credit revenues have emerged, forecasts suggest that Tesla's stock price recovery will be difficult for some time.

Stock Price Lower Than at Trump's Election... Tesla Board Chairman Also Sells Shares

Recently, Tesla's stock price has shown weakness, leading to assessments that the benefits from President Trump's election have completely faded. On the 6th (local time), Tesla's stock price was $263.45, falling below the $288.53 recorded on November 6 last year when Trump's election was confirmed. The status of being the strongest Trump policy-themed stock in the U.S. has thus lost its luster.

After Trump's election, Tesla's stock price rose continuously for six weeks, reaching an all-time high of $479.86 on December 17 last year. At that time, Musk, who emerged as one of Trump's closest allies, joined the administration, fueling expectations for deregulation of Tesla and causing a surge in the stock price. However, from then on, the stock price turned downward for seven weeks, plunging 45% from its peak.

Amid the ongoing stock price decline, Tesla's key executives have also sold their shares, further weakening investor confidence. On the 3rd, Robin Denholm, Tesla's board chairman, sold 112,390 shares of Tesla stock worth $33.7 million (approximately 48.8 billion KRW). Denholm, who leads Tesla's board in place of Musk, now head of the Department of Government Efficiency, has been continuously selling Tesla shares since the end of last year.

Boycott Movement Spreading in Europe and the U.S.... Arson Incidents Also Occur

AP Yonhap News

The boycott movement against Tesla, spreading mainly in Europe, is also cited as a cause of Tesla's stock price plunge. Tesla became a target of boycott campaigns centered in Germany after CEO Musk publicly supported the far-right party 'Alternative for Germany (AfD)' in the German federal election held on the 23rd of last month.

According to the New York Times (NYT), data from the German Federal Motor Transport Authority on the 5th showed that new registrations of Tesla electric vehicles last month dropped 76% year-on-year to 1,429 units. In contrast, total electric vehicle registrations in Germany increased by 31% during the same period. Within Germany, backlash against Musk's support for the far-right party has grown, leading many consumers to abandon purchasing Tesla vehicles or existing customers to resell their cars.

Not only in Germany but across Europe, Tesla electric vehicle sales have also significantly declined. According to data released on the 25th by the European Automobile Manufacturers Association (ACEA), Tesla's electric vehicle sales in Europe in January fell 45% year-on-year to 9,945 units. This data combines sales figures from European Union (EU) member countries, the United Kingdom, and Switzerland.

Beyond sales declines due to the boycott, acts of vehicle destruction and vandalism by anti-Musk protesters have occurred in various locations. According to CNN, on the 3rd, a fire broke out at a Tesla charging station in Littleton, Massachusetts, U.S., destroying seven chargers. Local police are investigating the incident as arson. On the same day, a woman was arrested in Loveland, Colorado, U.S., for spray-painting 'X' marks and the word 'Nazi' on Tesla-branded vehicles parked at a Tesla dealership. On the 2nd, an arson fire at a Tesla dealership in Toulouse, southern France, destroyed 12 Tesla vehicles. French police are investigating the incident, suspecting arson by anti-Musk protesters.

Concerns Over Reduced Carbon Credit Revenues Amid Sharp Decline in Electric Vehicle Sales

Reuters Yonhap News

As Tesla vehicle sales in Europe have sharply declined due to the boycott, concerns have been raised about a decrease in carbon credit sales, which constitute a significant portion of Tesla's revenue. If the boycott continues, there is a risk that existing carbon credit contracts with major automakers could be canceled.

According to CNBC, Tesla's carbon credit revenue last year was $2.76 billion (approximately 4.0287 trillion KRW), accounting for 39% of its net profit of $7.1 billion during the same period. As an electric vehicle manufacturer, Tesla has contracts to sell carbon credits to major automotive brands such as Stellantis, Toyota, and Ford.

Currently, the U.S., China, and various European countries grant credits to manufacturers of eco-friendly vehicles like electric cars, allowing them to sell carbon credits proportional to their vehicle sales to other companies. Eco-friendly vehicle manufacturers like Tesla have earned revenue by selling these credits to internal combustion engine vehicle manufacturers that exceed carbon emission limits. Ultimately, if Tesla's electric vehicle sales decline persistently, it will face a dual reduction in both vehicle sales revenue and carbon credit income.

Wall Street is also concerned about the prolonged weakness in Tesla's stock price. The major U.S. investment bank Goldman Sachs lowered its target price for Tesla from $345 to $320. Analyst Mark Delaney stated, "Due to the overall demand trend for electric vehicles and the decline in European sales, Tesla's delivery estimates are expected to decrease," adding, "Tesla is facing difficult fundamental conditions in the short term."