Inside Tesla's terrible year

Elon Musk made the electric car giant what it was - but he could also be its undoing. Richard Hall takes a closer look

- Richard Hall

Even in a turbulent economic climate, in a nascent industry that is prone to volatility, and in the middle of a geopolitical balancing act that impacts all of the above, the fall in the value of Tesla over the last year has been dramatic.

From a valuation of $1 trillion near the end of 2021, the American electric car company began 2023 with a market cap of $383.76bn. In the last 12 months, the share price has fallen by 69 per cent.

That drop made Tesla CEO Elon Musk the first person ever to lose $200bn (£165bn), the largest wealth decrease in history. It also threatens the supremacy of the first car company to bring electric vehicles into the mainstream.

So, why has Tesla stock fallen so dramatically? And can the former darling of Wall Street reclaim his crown? 

A social media obsession

The story of Tesla's decline begins with an obsession. Long before Musk sought to buy Twitter, he was a prolific user of the social media site. Musk has tweeted more than 22,000 times since joining in 2009, sharing personal musings, news about his various businesses, alt-right memes and about Twitter itself.

But Musk was not content to be just a user of Twitter, he wanted to control and shape it. At the beginning of April, a filing with the Securities and Exchange Commission revealed that Musk was Twitter's biggest shareholder, with a stake of 9 per cent. Soon after, he announced his intention to buy the company.

From the day his stake in Twitter became public, Tesla stock began to steadily decline. At the time, Tesla's shares were trading at around $360. When he finally purchased the company in October the price had dropped to $219. By December of 2022, Tesla's price had dropped to $150, and longtime investors in the company were beginning to sound the alarm.