Tesla's Turbulent Times: Beyond the Headlines

Tesla's recent struggles are more than just a public spat between Elon Musk and Donald Trump. The company's financial health is deteriorating, and it might be back to losing money. This isn't just about Musk's political antics; there are deeper issues at play. Musk was once Trump's biggest financial backer, but things have changed. He's started a new political party, unhappy with Trump's recent tax and spending bill. This political drama has investors worried, and Tesla's shares dropped 6. 8% on Monday. Analysts are concerned that Musk's focus on politics is distracting him from running the company. Dan Ives, an analyst from Wedbush Securities, thinks Tesla's board should set limits on Musk's political activities. He believes the company is at a critical point in its growth, especially with its autonomous and robotics future on the horizon. Despite this, Ives still recommends buying Tesla stock, with a target price of $500. However, analysts at William Blair have downgraded Tesla's stock to "market perform" and cut their earnings forecast. The recent political drama isn't the only problem for Tesla. Trump's new bill has removed a $7, 500 tax credit for electric vehicle buyers and eliminated penalties for automakers that don't meet federal emissions targets. These penalties used to force gas-powered car companies to buy credits from EV companies like Tesla. Without this revenue, Tesla might not have reported a profit until 2021, and it could be back in the red again. Musk has been talking up Tesla's future in robots, artificial intelligence, and self-driving taxis. However, Tesla's taxi service is still very limited, only available in Austin, Texas, for a select group of customers. And it's not without its problems, like a recent video showing a Tesla robotaxi driving on the wrong side of the road. Meanwhile, Waymo, Google's self-driving car unit, is already offering robotaxi services in four cities and plans to expand to Miami and Washington, DC, next year. Investors are getting tired of the distractions and want Musk to focus on Tesla's business, especially the robotaxi rollout. Tesla's sales are also a concern. Global sales were down a record 13% in the first two quarters of this year, even though overall demand for EVs is climbing. This is a sign of Tesla's declining market share, partly due to increased competition from other automakers. Chinese automaker BYD is even poised to surpass Tesla in global annual EV sales this year. Demand is likely to weaken further when the $7, 500 tax credit for electric car buyers expires in October. Tesla has also faced backlash due to Musk's political activity, which has impacted sales. Protests were held outside Tesla showrooms in the US, Canada, and Europe earlier this year. Musk seems to have alienated both sides of the political spectrum, which could continue to hurt Tesla's sales.