Douglas A. McIntyre
4 min read
Quick Read
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Tesla’s five-year stock has fallen 2% while the S&P 500 gained 61%, crushed by EV competition and Musk’s political controversies.
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China’s 129 competing EV brands triggered desperate price wars that eroded Tesla’s position in the world’s largest car market.
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Despite Musk’s push to rebrand Tesla as an AI and robotics company, over three-quarters of revenue still comes from EV sales.
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What was once among America’s hottest stocks has now turned negative based on its five-year stock price. Tesla’s (NASDAQ: TSLA) share price is down 2%, while the S&P 500 is up 61%. One factor behind the slide was CEO Elon Musk’s role at the “Department of Government Efficiency” (DOGE), created in late 2024 by President Trump to cut waste from the federal government. The two men clashed over government policy in mid-2025, which didn’t help the share price either. However, ultimately it was the faltering of the EV industry that signaled the end of Tesla’s sales growth.
The early anxiety about Tesla sales began in May 2021. Ford (NYSE: F) committed to a $30 billion investment to grab a larger part of the US EV market. Although it failed badly, it showed that legacy car companies believed EV investments were necessary as buyers moved away from fossil fuel-powered cars. GM, along with Japanese, South Korean, and European car companies, was never as financially ambitious as Ford, but together they captured double-digit market share in the US.
Tesla’s sales in Europe were also healthy. However, in a mirror of Tesla’s competition problem in the U.S., the region’s largest car companies followed Ford and GM (NYSE: GM). Financially, their EV bets did not turn out much better than America’s two largest car companies.
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What hurt Tesla the most was that the Chinese car market, the largest in the world, was swarmed with local companies. Eventually, 129 EV brands operated in China. Reuters reported that only 15 were expected to survive. However, market share was split up, and desperate price cuts meant to keep smaller companies in business affected the entire market.
