It is a pivotal moment for Tesla (NASDAQ: TSLA) shareholders. CEO Elon Musk has officially stepped away from his advisory role in President Trump’s Department of Government Efficiency (DOGE), just as the company gears up to roll out its robotaxi technology in Austin, Texas.
Despite the upcoming launch, Tesla stock dropped sharply this morning, falling 5% at its low and still down 3.2% as of 11:40 a.m. ET. Two key issues appear to be weighing on investor sentiment.
First, Tesla’s vehicle sales continue to slide. In Germany, May sales dropped 36% year over year, even as the country’s overall EV market grew by nearly 45%. Tesla’s challenges aren’t limited to Europe either, deliveries from its Chinese factory also fell 15% year over year last month, signaling rising competition in that crucial market.
While investors have been somewhat patient this year, in part due to the production ramp-up of the updated Model Y, today’s sell-off reflects mounting concerns. The second factor rattling investors is Musk’s increasingly public split with President Trump and key Republican figures over the federal spending bill currently moving through Congress.
That political rift could have serious implications. Musk has been lobbying for unified federal regulations on autonomous driving—a critical need as Tesla prepares to launch its Full Self-Driving system in Texas later this month. A fragmented, state-by-state regulatory landscape could complicate that rollout and dampen the long-term value Musk has repeatedly tied to Tesla’s autonomous technology.
For now, investors are watching closely—not just the numbers coming out of Tesla’s global sales, but also Musk’s evolving relationships in Washington, which could play a significant role in shaping the company’s future.