Investors abandoned Tesla’s (NASDAQ: TSLA) stock so quickly that the price dropped 34% this year. Based on its current trajectory, it may keep falling. The drop has been blamed on CEO Elon Musk, who has recently been trying to fix the US government as the primary change agent for President Trump. The political alliance may have hurt Tesla sales in the US and Europe. However, Musk has a card up his sleeve. He said Tesla is an AI and robotics company. Tesla’s stock could become part of the demand for the hottest market sector.
Musk has a great deal to overcome. One issue is who runs Tesla when he is in Washington. He has not appointed an effective chief operating officer.
Musk is viewed as a hard right-wing conservative, which may have alienated liberals. He has also supported right-wing candidates outside the US, which may have alienated voters in several European nations. Through the first two months of this year, Tesla sales have dropped in high double digits in some of Europe’s largest car markets.
There is also evidence of a drop in Tesla sales in China, the world’s largest EV market. Based on February statistics, Tech in Asia reports, “The company delivered 30,688 Shanghai-made Model 3 and Model Y vehicles, representing a 51.5% drop from January and a 49.2% decline year-over-year.
One of the most important voices in the global tech industry is Jensen Huang, the CEO of AI chip company Nvidia. He told Yahoo Finance that Tesla was “far ahead” of its rivals regarding AI-powered vehicles.
AI-powered cars should be entirely self-driving. Tesla has a feature called “Full Self-Driving Mode.” However, Tesla says, “The currently enabled Autopilot and Full Self-Driving (Supervised) features require active driver supervision and do not make the vehicle autonomous.”
Self-driving means that drivers can ignore operating the car as it travels. Several other companies, led by Alphabet’s (NASDAQ: GOOG) Waymo, have had some success with these features. However, even if these products are successful, they must be approved by authorities in states and cities around the US. The same process exists in Europe and China.
How does Tesla get back on track with rapidly rising shares? It proves it is the clear leader in self-driving technology.
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