On March 11, Elon Musk may never have imagined that he would fall into such a complex whirlpool in the spring of 2025.As CEO of Tesla and head of the U.S. Department of Government Efficiency (DOGE), he admitted in an interview with Fox Business Channel on March 10 that it was "extremely difficult to run business", but insisted that he would promote the federal government's "slimming plan"-this statement coincided with Tesla's share price suffering the worst single-day plunge of 15.43% in five years, and its market value evaporated by 945.9 billion yuan in a single day, halving from an all-time high.This avalanche in the capital market is not only a concentrated outbreak of the deterioration of corporate fundamentals, but also a manifestation of the risks that Musk's political role is deeply tied to corporate operations.

Sales stall and valuation reconstruction: Tesla's "triple cliffs"

The simultaneous decline in global core markets has pushed Tesla into a growth dilemma.The European market has become the hardest hit: deliveries in January 2025 dropped by 45% year-on-year, sales in Germany plunged by 76.3% in February, and the French and Norway markets shrank by 63% and 38% respectively, and their market share shrank from 1.8% to 1%.China's market also fell. Wholesale sales in February were 30688 vehicles, a year-on-year decrease of 49.16%, and its market share fell 4 percentage points year-on-year to 3.9%, which was further dimmer by BYD's growth rate of 161.4%.Even in the domestic U.S. market, sales experienced a negative growth of 2% in the first two months. Wards Intelligence data shows that demand fatigue has evolved from a regional crisis to a systemic risk.

This cliff-like decline points to the wavering of valuation logic.Tesla's current P/E ratio is as high as 48 times (as of March 10), far exceeding Apple (28 times) and Microsoft (32 times). Its premium is based on expectations for autonomous driving technology leadership and scale expansion.But the reality is that FSD (fully autonomous driving) is facing catch-up by technologies such as Xiaopeng and Huawei in China, and regulatory barriers are high in Europe. The aging Model 3/Y product cycle and the shelving of low-cost model plans have made the market worry about the product matrix.UBS analyst Joseph Spak pointed out that Tesla's order waiting period has been shortened to 2-4 weeks, indicating weak demand-side support. Coupled with rising production capacity and political controversy, the Q1 delivery forecast has been lowered by 16% to 367,000 units.

The political spectrum tears brands: from "technology idols" to "partisan symbols"

Musk's deep binding with the Trump administration is deconstructing Tesla's hard-working brand narrative.As the head of DOGE, the federal layoffs he led (10,000 government employees have been cut) and tough tariffs (a 25% tariff on Mexico Power) are in sharp opposition to Tesla's early image of environmental protection and progressivism.This tear is rapidly growing on the consumer side: Tesla stores in Colorado were set on fire, boycotts broke out in many European countries, and potential buyers were deterred by concerns that vehicles would become a "political target."Baird analyst Ben Kallo observed that even supporters are beginning to weigh the social risk of "vehicles being scratched or even burned", and this emotional contagion is often fatal to high-end consumer goods.

Political risks more directly impact capital pricing.Musk devotes 80 hours a week to government reform, raising investors 'concerns about his distraction; the DOGE team's "read-only access" to the Treasury's payment system was assessed as an "unprecedented threat" by internal federal agency reports, exacerbating compliance concerns.The opacity of this governance structure, combined with the expectation of rising supply chain costs triggered by Trump's tariff policy (Canada's electricity tariffs on the United States have been implemented), makes Tesla a micro carrier of macro uncertainty.

Wall Street's "expectation management revolution": From faith investing to risk pricing

The shift in attitude among institutional investors signals that the market is reassessing Tesla's pricing paradigm.Bank of America cut its target price from US$490 to US$380, and Goldman Sachs and UBS simultaneously downgraded their ratings. The reasons expanded from simple delivery concerns to "brand discounts caused by management politicization."This revision of valuation models has paradigm significance: when the political activities of business leaders begin to systematically influence consumer preferences and the regulatory environment, traditional DCF models must incorporate geopolitical Beta coefficients.

However, the market is not entirely pessimistic.Ark Investment still adheres to the forward target price of US$2600, and its logic is based on the commercialization of Robotaxi and the annual revenue forecast of US$760 billion.This disagreement highlights that Tesla is in a "hopeless transition" period: old momentum (hardware sales) is fading too fast, and new narratives (autonomous driving, energy networks) have not yet been fulfilled.Musk's confidence in declaring on Platform X that "everything will be fine in the long run" may come from DOGE's daily cost savings of US$4 billion and the macro dividends that the U.S. government's US$2 trillion deficit reduction plan may release.But capital markets clearly lack patience-stock prices have fallen to a record for seven weeks in a row, suggesting that investors need clearer signs of recovery rather than a grand vision.

The "boomerang effect" of the efficiency revolution: how to break structural contradictions?

The essence of this crisis is the collision of Musk's "efficiency first" concepts in different fields.At the DOGE level, he tried to transform government agencies with a technology enterprise methodology, auditing data from the Ministry of Education through AI and abolishing redundant institutions in 450 federal departments. Although this radical reform won 70% of the public's support, it triggered a counterattack from deep government interest groups.At the corporate level, the delivery window caused by the upgrade of Tesla's Shanghai factory exposes the mismatch between "Musk time" and the pace of the capital market-when the founder also shoulders political missions, the consistency of corporate strategy will inevitably be damaged.

Perhaps the key to resolving the situation lies in risk isolation.Some analysts suggested Tesla set up an independent board of directors to oversee the impact of government affairs, while accelerating the localization of FSD in China to hedge geopolitical risks.Whether Musk can replicate SpaceX's "balancing politics and business" and rebuild investor trust while maintaining DOGE's reform momentum will determine whether Tesla can survive this storm of value revaluation.After all, when the efficiency revolution rises from corporate governance to national strategy, its creativity and destructiveness will be exponentially amplified-an unprecedented stress test for any individual and institution.