Tesla Inc. ( TSLA ) saw its market capitalization fall below the symbolic $1 trillion mark on Tuesday as shares plunged 8.39% to $302.80, bringing the company’s valuation to $948.81 billion.

What Happened: The electric vehicle maker first reached the trillion-dollar milestone om Nov. 8, days after President Donald Trump‘s election victory. Since then, Tesla has lost significant ground, with shares down 36.0% from their Dec. 17 high of $473.86 and falling 28.59% since Trump’s Jan. 20 inauguration.

Some investors point to CEO Elon Musk‘s Washington commitments as a key factor in the decline. Musk has been spending considerable time in the capital leading Trump’s Department of Government Efficiency (DOGE), where his aggressive cost-cutting measures have resulted in federal worker layoffs and nationwide protests.

Musk’s net worth has dropped over $74 billion this year but remains the world’s highest at $358 billion, down from a $486 billion peak in December, according to the Bloomberg Billionaires Index. The last reported change is pegged as a decline of $22.2 billion by Bloomberg. The figures are updated at the close of each trading day.

These protests have directly impacted Tesla’s brand, with demonstrations occurring at showrooms across major U.S. cities including New York and Seattle. Some incidents have escalated to vandalism of Tesla vehicles and charging infrastructure, with one Supercharger station recently defaced.

European Tesla sales plunged 50.4% year-over-year in January, with sharp declines in Germany, down 59.5%, France, down 63.4%, Spain, down 75.4% and United Kingdom, down 18.2%.

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Why It Matters: Customer sentiment has also soured. Montreal resident Alain Roy, a former Tesla enthusiast who owned both a Model Y and Model S, said he was selling his vehicles and canceling his Cybertruck order specifically because of Musk’s political activities. Singer Sheryl Crow similarly parted with her Tesla, stating on Instagram there comes a time “when you have to decide who you are willing to align with.”

Product concerns are compounding these issues. Reuters reported Monday that Tesla’s upgraded “navigate on city streets” feature in China has disappointed users, falling short of Musk’s self-driving promises. Chinese competitors like BYD and Xiaomi offer similar technologies at lower costs or as standard features.

Despite these challenges, Wedbush Securities analyst Dan Ives maintains a bullish $550 price target on Tesla, arguing that brand concerns are “bark way worse than the bite.” Tesla reported its first annual sales decline in 2024, suggesting the company’s post-election market surge has largely evaporated.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.