Elon Musk has a very bad day as investors go into full-blown panic mode

Elon Musk leaves a meeting with House Republicans in the basement of the US Capitol building on March 5. Getty Images / AFP

Elon Musk spent more than $270 million of his own money to help get Donald Trump elected. That is just a fraction of the true cost of the Tesla chief executive's devotion to the US President.

Perhaps it doesn't matter to the world’s richest man, but Mr Musk's antics since the January 20 inauguration have been costing him billions of dollars a day as a global backlash gains momentum against Tesla, the company with which he is most closely associated.

The starting signal for Tesla's collapsing share price – it lost more than 15 per cent on Monday alone – seems to have been the apparent Nazi salute Mr Musk gave at the inauguration. Shares in the electric car maker have tumbled during each of the seven weeks since and are now trading at $222.15, down from $488.54 in December.

That equates to a decline in Mr Musk’s net worth from $464 billion late last year to $322 billion today, according to Forbes. Still an unfathomable amount of money, but a 30 per cent drop nonetheless. Monday's sell-off was Tesla’s worst day in five years and cost Mr Musk $22 billion. Compounding his woes, the tech titan's social media platform, X, was the target of what he described as a “massive” cyber attack.

Demonstrators gather outside a Tesla dealership. EPA

The slump can't be blamed entirely on Mr Musk, as it comes amid a broader drop in US markets driven by Mr Trump’s flip-flopping on tariffs and fears of a trade war and recession. Still, Tesla shares have massively underperformed the market.

Mr Musk's support for Mr Trump and far-right political parties in Europe have sparked anger in several of Tesla’s key markets, with protests aimed at showrooms, charging stations and Cybertrucks becoming increasingly violent, including several reported arson attacks.

The same people who were once drawn to Tesla for its promise of a reduced-carbon future are now selling their cars en masse, dumping stock or putting disclaimers on their vehicles saying they had bought them before “Elon went crazy”.

Mr Musk is a prolific poster on X, frequently amplifying far-right voices or echoing Moscow's anger at Ukrainian President Volodymyr Zelenskyy. Long a polarising figure, Mr Musk has become even more of a lightning rod for criticism since firing tens of thousands of federal workers, many of them veterans, as his Department of Government Efficiency, or Doge, aims to cut fraud and waste from the government.

His moves have generally proven popular among Mr Trump's Make America Great Again movement, which is revelling in the purge of what it sees as a corrupt and liberal deep state that is determined to block the President's agenda. But how long that support lasts could depend on the health of the US economy, with the threat of a recession growing as Mr Trump launches a trade war against Canada, Mexico and other countries. And many of the fired federal workers were Trump voters living in conservative states, where communities are starting to feel the impacts of mass layoffs.

Mr Musk has been a regular fixture at the White House since January, and famously showed up in the Oval Office wearing a T-shirt, baseball cap and jacket with one of his sons on his shoulders. But the same President he is so close to is also pushing policies that could further hurt Mr Musk, including ending electric vehicle rebates and subsidies that helped to prop Tesla up in the first place.

Mr Musk has said ending those policies could hurt Tesla's rivals more, and so on balance help Tesla.

But Tesla faces several challenges as a range of new EVs come on to the market. Its share price has long been wildly overvalued, with its market cap of $696 billion more than Toyota, General Motors, Ford and several other car makers combined. Investors have been sold on the promise that cars are just one small part of Tesla’s potential, with artificial intelligence and robotaxis looking set for sky-high returns.

One problem for Mr Musk is that the Maga crowd is deeply sceptical of electric cars and so is unlikely to go far in replacing the plummeting demand for Teslas from elsewhere.

Tesla's sales in China dipped by nearly 50 per cent last month. Politics are unlikely to have been the driving force there, with analysts pointing instead to the rapid growth in China's own electric cars, which are often cheaper than Teslas.

The drop in sales is particularly alarming in Europe, where Tesla purchase in Germany dropped 76 per cent in February and 55 per cent in Italy. Both countries are still acutely aware of their fascist past, so perhaps an apparent Sieg Heil salute on the world stage wasn’t the smartest idea for Mr Musk.