Why is Elon Musk's Tesla failing?

It is clear from events in the past few weeks that Elon Musk's crown jewel company Tesla has seen pullbacks in overall success.

The electric vehicle manufacturer has experienced a strong wave of support by investors for the strong reliability and functionality of its vehicle models, such as the Model 3 and the Model S. It experienced a strong bullish increase in share price as a result.

However, the company has recently fell dramatically in share price, but this leaves the question of why? Why is the largest electric vehicle manufacturer seeing massive drops in support?

One of the key factors of the company's decline is the political views of its CEO, Elon Musk. Musk, a multi-billionaire, express unwavering support for former president Donald Trump's 2024 campaign after a failed assassination attempt in Butler, Pennsylvania. Despite the event's less partisan reaction by the political community, Trump is still very disliked by Americans, and Musk supporting him doesn't benefit his reputation any more.

Elon has also reported promising subsidies to the Trump campaign of over $45 million per month, which could make a difference in the outcome of the election. Musk's political stance and tampering of American politics has isolated a large community of consumers who cared only about the products, not indirectly supporting a presidential campaign. Musk became very disliked among liberal-leaning consumers who now viewed Tesla partially as a conservative partisan donor.

The company's losses has also been contributed by a poor earnings report released in July. The report found a stark 45% drop in profits as consumers have become more turned off by the EV industry. Moreover, Tesla's large gambles on funding of AI and driverless taxi programs have failed thus far and have been delayed, losing investors' trust in the company and initiating a massive sell-off.

Even worse for Tesla, the company has made substantial increases in the prices of its vehicles in order to make up for losses, especially in its models of the Cybertruck. This has turned off many consumers who valued Tesla for its affordable electric vehicles.