Tesla stock is down more than $20 a share at the time of writing, following a huge Democratic win across the nation on Election Day, Nov. 3.
The stock has dropped more than 10% in the last five days. Tesla and SpaceX are both based in Texas, which experienced a massive blue wave during the midterm elections.
Following Texas victories by Democratic state Rep. James Talarico and Democrat Gina Hinojosa, will Elon Musk and his companies be subjected to intense scrutiny and regulatory hurdles? Here's how Musk's political involvement affected Tesla in 2025 and where the brand stands after the midterms.
How Elon Musk's political moves impacted Tesla in 2025
Tesla CEO Elon Musk began to support President Donald Trump during the spring of 2024, spending millions of dollars to help found and fund America PAC.
By 2025, Musk was appointed as a special government employee co-leading the Department of Government Efficiency (DOGE).
Musk's support for Trump and involvement in DOGE had a catastrophic impact on Tesla sales in 2025, according to data from a Yale study. The study estimates that Tesla lost around one million vehicle sales and more than $51 billion in revenue between October 2022 and the height of Musk's political involvement in April 2025.
As for the company's stock and shareholder value, Tesla's share price plummeted from $410 on Jan. 3, 2025, all the way down to $241 in April. Musk left his role at DOGE after serving 130 days following one of the worst first quarters in the company's history.
Can midterms hurt Tesla sales and brand growth?
Elon Musk may have moved Tesla and SpaceXfrom Democratic-led states such as Delaware and California for business and regulatory reasons, but the blue wave that just hit the Lone Star State could present some of the same challenges the CEO hoped to escape in the first place.
The Democratic sweep of Congress could result in increased inquiries into Musk's government contracts and tighter federal oversight of autonomous vehicle technology.
Democratic control of Congress could increase scrutiny of Tesla's Cybercab, the company's self-driving robotaxi operation, according to Investors.com. Potential regulatory hurdles could have financial implications for Tesla's business, particularly the growth of the Cybercab fleet.
As for Tesla passenger vehicle production and sales, the brand remains a huge employer for Texas and there's no reason for the company to stop cranking out Tesla EVs. Sales are unlikely to be impacted, but the Cybercab part of Tesla's business may face new challenges that Musk hasn't foreseen.
Where Tesla stands in the EV market in 2026
Tesla produces the two best-selling electric vehicle nameplates in America in 2026. The brand had sold more than 262,491 Model Y electric SUVs as of October, according to data from Cox Automotive. It had also sold 106,962 Model 3 electric sedans as of October. Tesla has sold more EVs in 2026 than Chevrolet, Cadillac, GMC, Hyundai, Kia, Toyota and Lexus combined.
The American clean energy and electric vehicle company is so far ahead of the competition in sales that it doesn't seem like any brand could catch up. Between its longer production history compared with electric-only brands like Rivian, the strength of its charging infrastructure and some of the most competitive sedan and SUV models, Tesla is virtually untouchable from a sales perspective.
Rival automakers may produce more affordable models, but between brand familiarity, performance and charging ease, thousands of American car buyers continue to choose Teslas over other EVs.
Does Tesla make the best electric cars on the market by a large margin?
Let me know your thoughts on the clean energy and electric vehicle company at CSingh@Gannett.com. Charles Singh is an Autos Connect Reporter for The Tennessean, part of the USA TODAY Network.
This article originally appeared on USA TODAY: Politics hurt Elon Musk and Tesla before. Could midterm results do it again?
