It's an interesting time to be a Tesla (TSLA 5.72%) shareholder. CEO Elon Musk has stepped away from his leadership role in President Trump's Department of Government Efficiency (DOGE) cost-cutting effort. The timing was presumably good, as Tesla is preparing to launch its robotaxi technology in Austin.
Yet Tesla stock dove 5% this morning. As of 11:40 a.m. ET, shares of the electric vehicle (EV) leader are still lower by 3.2%.
Image source: Tesla.
Tesla investors are still watching Washington
The drop likely comes for two reasons. First, data on Tesla EV sales continue to show declines. German sales fell 36% year over year in May. That drop came even as overall EV sales jumped nearly 45%. The competitive Chinese market looks to be getting tougher, too. May shipments from Tesla's Chinese factory declined 15% year over year.
Investors have been overlooking some of the drop in Tesla sales this year, though, as the revamped Model Y makes its way through production to increase availability for those waiting for the remodel.
Another concern has investors selling Tesla stock today. Musk has started very publicly splitting with President Trump and other Republicans over the spending bill making its way through Congress. That could have ramifications as Musk lobbies regulators for a federal approach to autonomous driving rules.
Self-driving cars being regulated state by state would be a major headache for Musk and Tesla. Tesla's Full Self-Driving launch in Texas is expected by the end of this month, and Musk has openly said much of Tesla's value is in that technology. His relationship with Trump could have helped him standardize regulations on the technology.
A fissure in the relationship could become a barrier. That has investors nervous today, and they're keeping their eyes on Musk and his interactions with leaders in Washington.
