Elon Musk’s influence on wealth creation has long been undeniable. More recently, this has been evident in the “Musk trade” — a trend of trading related to Musk that has increased the appeal of assets tied to the billionaire.

However, electric car company Tesla, which is Musk’s flagship company, no longer seems to be part of that success story.

Tesla shares are now down more than 50% from their recent highs, erasing all of their gains since the U.S. presidential election. The electric carmaker’s shares have fallen for seven straight weeks since Musk first visited Washington, DC, to support the Trump administration’s cost-cutting efforts.

Monday was one of the company’s worst trading sessions, with shares falling 15% — the biggest drop since September 2020.

Notably, no US stock has been more affected by Trump’s second presidential election than Tesla. At one point in December, Elon Musk’s car company had added $733 billion to its market capitalization since the US election — more than any other company in the S&P 500.

Even before Donald Trump won the presidential election and hired the world’s richest man as a performance adviser, Tesla—then valued at around $800 billion—was seen more as a “moonshot” than a car company.

The company is trading at about 80 times projected 2025 earnings, according to data from Capital IQ — putting Tesla in the top 3% of publicly traded U.S. companies valued at more than $1 trillion. The market’s average price-to-earnings (P/E) ratio at that point was just 15.

Even the boldest auto industry forecasts would be hard to justify at this valuation. Before the election, Lex estimated that Tesla’s car business was worth only about $240 billion, based on an optimistic scenario in which the company sold 6 million cars by 2030. The remaining $560 billion appears to be a “mix of expectations” about future projects—from self-driving taxis to humanoid robots.

It is now clear that while the initial “Musk trade” wave was successful in boosting market sentiment and valuations in the cryptocurrency space and related companies, Tesla is now facing a separate set of issues that are holding back the company’s growth.

Tesla’s electric car business, for example, is struggling. Sales fell sharply last month in many countries. Tesla sales were down more than 40% year-on-year in Norway, Denmark and Sweden.

In China – an important market for Tesla – car sales fell 49% compared to the same period last year, while in Germany, the drop was even as high as 76%.

Wall Street is also concerned about Tesla’s full self-driving (FSD) software and competitive pressure in the autonomous vehicle space. For example, BYD, Tesla’s Chinese rival, saw sales in China jump 90% year-over-year in February.

Meanwhile, Musk’s flamboyant presence in Washington has had little effect, with some investors saying his political moves are distracting him from his work at Tesla.

“We think shareholders have good reason to be concerned that Elon Musk is too distracted and it’s clear that he now spends more time on DOGE than on Tesla,” Garrett Nelson, senior equity analyst at CFRA Research, told Business Insider last week.

Despite President Trump’s pledge to buy a new Tesla, the electric carmaker is in even worse shape than it was last November. Sales in Europe have plummeted; Tesla has faced protests and vandalism.

Production in China — a huge market for Tesla — has also plummeted. While Musk has claimed that ending electric vehicle credits in the US would benefit Tesla by weakening its competitors, that theory remains untested.

But remember: Tesla isn’t valued like a regular car company, so the company’s valuation decline—including a brutal 15% drop on Monday—isn’t entirely about the car business.

Instead, Tesla’s huge post-election surge and subsequent decline reflect a shift in investors’ views on the viability of Musk’s “moonshot” projects.

In that sense, Musk’s value to Tesla has probably shifted from overvalued to undervalued. Ultimately, Tesla’s ability to ultimately reshape the autonomous vehicle industry probably hasn’t changed much. It’s true that Musk is spending less time on Tesla now, but he was busy with a host of other projects long before he was in the White House.

As for humanoid robots, the chances of success for this project remain largely the same. Musk has said that the successor to the Optimus prototype robot could be “the biggest product of any kind ever.”

It may be a rather arrogant statement, but the future of the world is certainly automation and robotics. Bank of America analysts recently doubled their forecast for the number of humanoid robots shipped globally, to 10 million units by 2035.

The problem is, the more he promises, the less convincing Musk becomes, especially as valuations in the tech industry have weakened. For example, in January, Musk told analysts that Tesla could be worth more than Apple, Microsoft, Nvidia, Amazon, and Alphabet combined — currently worth about $13 trillion.

As of Monday, Tesla was only 5% of the way there. Tesla briefly topped $1.5 trillion in market value; but only credibility can bring the company back to that level.

Outside of Tesla, Musk’s other businesses don’t seem to be subject to the same level of skepticism, if any.

February was particularly good for Musk’s two private companies. After being saddled with debt since 2022, social media platform X sold nearly $5 billion in debt that Musk used to finance its acquisition. xAI is also in talks to raise $10 billion at a valuation as high as $75 billion.

Meanwhile, SpaceX’s valuation shows no signs of slowing. The company went public in December at a valuation of $350 billion, up from $210 billion.