In the weeks after Donald Trump won the U.S. presidential election, investors pumped more than $700 billion into Tesla Inc. shares, betting that Elon Musk’s relationship with the commander in chief and growing political prominence would pay off for the automaker. Barely four months later, that wager is shaping up to be one of the biggest duds of the equity market.

Tesla’s stock, initially one of the biggest winners after Election Day, is on pace for a record seventh straight week of losses, and on Friday briefly fell below where it closed on Nov. 5. The stock sank as much as 4.8% to $250.73 by 12:40 p.m. In New York. It closed at $262.67.

It’s a stark reversal from the post-election fervor, when traders piled into Tesla in the belief that the Musk-Trump friendship would facilitate the automaker’s evolution into a dominant player in self-driving vehicle technology. But this premise ignored a key reality: Tesla’s core electric-vehicle business, the source of its current cash flow, was hitting the skids — and a victory by EV-averse Republicans would do little to help with that even as overseas trends also soured.

Meanwhile, Musk’s preoccupation with politics rather than the day-to-day duties of a chief executive officer only seems to be making matters worse.

“There was a lot of irrational exuberance in Tesla shares after the election that appears to have essentially backfired, as many investors hitched their wagon to the ties between Musk and President Trump instead of focusing on the fundamentals of the company itself,” said David Wagner, portfolio manager at Aptus Capital Advisors.

Tesla’s sales, which had already been losing momentum amid an industry-wide slump, are tumbling in key global markets. After steep slides in January, data this week showed its China-made wholesale deliveries fell to the lowest in more than two and a half years in February, even as domestic giant BYD Co.’s sales soared. In Australia, Tesla’s sales plunged 72% last month. Numbers in Norway, France and Germany were equally dire.

Some of the decline is due to a production halt at plants that make its top-selling Model Y, in order to rework assembly lines. But Musk’s political connections, once seen as a plus, are also quickly turning into a liability for Tesla. His chainsaw-wielding efforts to cut U.S. government spending at the newly formed Department of Government Efficiency (DOGE) have sparked a backlash among some of the electorate, who have targeted Tesla as a proxy for Musk. Outside the U.S., his alignment with far-right factions in Europe have soured would-be customers there.

“Tesla’s post election pump in stock price has come to a screeching halt thanks to what’s been ugly sales results coupled with increasing backlash against Musk himself, especially in Europe,” Dave Mazza, chief executive officer at Roundhill Financial Inc.

Tesla’s precipitous sales declines have prompted at least two Wall Street analysts to slash price targets on the stock this week. Robert W. Baird analyst Ben Kallo cut his target by 16% to $370, while Bank of America’s John Murphy lowered his by 22% to $380.

“Intra-quarter sales data from Tesla’s key regions lead us to believe there is risk to the consensus first-quarter delivery estimate of 437,500 units,” Kallo wrote in a note to clients on Thursday. “Production downtime associated with the Model Y refresh complicates the supply-side of the equation while at the same time, Musk’s involvement with the Trump administration adds uncertainty to the demand-side.”

Data compiled by Bloomberg show analysts currently estimate Tesla to deliver 420,100 units in the first three months of 2025, down from 590,000 expected for the same period at the beginning of 2024.

As the car business struggles, the self-driving technology or robotaxi — seen as key to Tesla’s future fortunes — is still only in development stage and is expected to face strong competition from rivals such as Alphabet Inc.’s Waymo. Industry experts say a full-fledged commercial adoption may still be years, if not decades away.

As a result, earnings estimates for Tesla are sinking. Analysts expect it to earn an adjusted profit of 52 cents a share in the first quarter, down 45% from what they expected for this same period a year back. Revenue estimates have dropped 21%.

Tesla shares still trade at 83 times forward earnings, dwarfing the 27 times average of mega-cap peers — a reflection in part of the Musk-related premium investors have always built into the stock. But that’s down substantially from mid-December, when the price-to-earnings ratio was hovering around 145 times. For Gary Black, co-founder at Future Fund Advisors and an investor in Tesla, it comes down to dollars and cents.

“Unless a company’s fundamentals follow the surge in a stock’s valuation, the valuation will ultimately return to earth,” he said.

(With assistance from Carmen Reinicke.)

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