Is DOGE hurting Tesla stock? TSLA shares are down since Elon Musk’s efficiency efforts began under Trump

It has been a rough 2025 for Tesla investors so far. After the company’s stock price (Nasdaq: TSLA) hit an all-time high of over $488 per share in December 2024—pushing Elon Musk’s net worth to north of $400 billion—Tesla shares have plummeted.

As of yesterday’s close, a day that saw TSLA shares dip more than 6% in a single trading session, the stock price has fallen over 18% since the new year alone

But much of 2025’s decline has happened since a specific date: January 21, the first trading day after President Donald Trump was sworn into office for a second term and one day after the president signed an order creating the Elon Musk-led Department of Government Efficiency (DOGE).

Since then, Tesla shares have fallen from a post-inauguration Monday high of over $433 per share to below $329 per share as of yesterday’s close, according to data from Yahoo Finance.

So, what is precipitating this stock price fall? Here are some likely possibilities.

Is DOGE harming Tesla’s brand?

It’s hard not to look at the $100 price drop since DOGE was created and started wreaking havoc across federal government agencies and believe there may be some causation.

As a matter of fact, detractors of Elon Musk—and those who outright loathe him—would probably be quick to jump to the conclusion that Musk’s DOGE antics are the reason Tesla’s stock price is sinking.

This isn’t to say these people are wrong. It’s very, very difficult to see how Musk’s DOGE involvement isn’t alienating many of the company’s more affluent, eco-friendly, liberal progressives who were among Tesla’s core customers.

However, it is probably too early to proclaim that any such alienation has already materially affected Tesla’s bottom line—yet. After all, it’s only been three weeks since DOGE came into creation and it’s not like Tesla gives a running daily tally on how many cars it sells. So we don’t know if or how much Tesla sales have actually declined since the creation of DOGE.

However, many Tesla investors are likely worried about Musk’s DOGE involvement, and the negative press the department has received may harm Tesla sales now and into the future.

Worried investors tend to sell stock—especially to lock in any existing gains before the future brings pain to the share price. Given this, it seems reasonable to believe that Tesla’s declining share price since January 21 is at least somewhat a reflection of investors’ fears and anxieties over Musk and DOGE tarnishing the company’s once-stellar reputation.

Musk’s involvement in far-right politics in Europe

Another possibility for Tesla’s recent share price fall may be related to Musk’s actions outside of the United States. In recent months, Musk has inserted himself into the politics of many European nations, most notably Germany, where he has used his own personal brand to boost the far-right Alternative für Deutschland (AfD) party, proclaiming on his X social media platform in December that “Only the AfD can save Germany.”

Musk’s increasing involvement in far-right politics in Europe has caught many by alarm (or, as Bill Gates put it, Musk’s involvement was “insane shit”). And there is some evidence that Musk’s European antics may be harming Tesla sales on the continent.

As the German broadcaster Deutsche Welle (DW) reported, Tesla sales plunged in Germany by nearly 60% in January. The Financial Times has reported that Tesla sales are plummeting in other European nations as well, with sales in France down 63% in January versus the same month a year earlier, and Reuters reporting that Tesla registrations were down in Sweden by 44% and in Norway by 38% in January versus the same month a year earlier.

Is Musk’s association with far-right politics on the continent to blame?

At the very least, it seems that Tesla investors are right to have concerns. When people start labeling your vehicles as “swasticars,” your brand might have an image issue.

Increased EV competition

Of course, investors could have other reasons to be bearish on Tesla stock. The most obvious is that the company is facing increasing competition around the globe. Long gone are the days when Tesla was the only electric vehicle maker on the market. It now has robust competition both at home and abroad.

That includes China—one of Tesla’s most important markets. Yesterday, a large reason Tesla shares slid over 6% was due to the announcement that Chinese EV maker BYD would integrate DeepSeek’s AI into its vehicles to help assist drivers with piloting the cars.

This driver-assisted DeepSeek integration provides BYD with a major advantage over Tesla in China now. Driver-assist technologies can’t be integrated into cars in China without regulators’ approval. Now, one of Tesla’s biggest competitors in the country can provide the popular technology to consumers. As CNBC notes, Tesla’s driver-assist technology, “Full-Self Driving,” has yet to receive rollout approval from Chinese regulators.