Tesla’s stock fell on Thursday after US Commerce Secretary Howard Lutnick made an unusual public recommendation for Americans to invest in the company.
While such endorsements from high-ranking government officials are rare, the comments came amid broader concerns over Tesla’s financial position and its close ties to the Trump administration.
Following Lutnick’s remarks on Fox News Wednesday evening, Tesla’s stock dropped 1.7% in premarket trading Thursday to $231.75. The decline adds to a recent downward trend, with Tesla shares having fallen 5% over the past five days, 35% in the past month, and 42% since the start of the year.
Market analysts are increasingly cautious about the company’s outlook. Ryan Brinkman, an analyst at JPMorgan, noted last week that Tesla’s rapid decline in value is unprecedented in the automotive industry, underscoring the challenges the company currently faces.
During his Fox News appearance, Lutnick encouraged viewers to invest in Tesla, saying:
“I think if you want to learn something on this show tonight, buy Tesla. It’s unbelievable that this guy’s stock is this cheap. It’ll never be this cheap again.”
He further emphasized his belief in Elon Musk’s leadership, questioning why anyone would hesitate to invest in the company.
However, Lutnick’s comments have raised ethical concerns, as federal regulations generally prohibit government officials from endorsing private businesses. The Code of Federal Regulations explicitly states that executive branch employees should not use their position for “the endorsement of any product, service, or enterprise.”
Jordan Libowitz, a spokesperson for Citizens for Responsibility and Ethics in Washington (CREW), noted that such remarks could be perceived as an attempt to boost Tesla’s stock price, particularly as the Trump administration has increasingly aligned itself with Musk’s business interests.
While Lutnick’s remarks were aimed at bolstering investor confidence, other Wall Street analysts remain cautious. Dan Ives of Wedbush Securities, a long-time Tesla supporter, described the company’s current situation as a “crisis” and urged Musk and Tesla’s board to take decisive action.
“Let’s call it like it is: Tesla is going through a crisis, and there is one person who can fix it… Musk.”
Ives stressed that Musk and Tesla’s leadership need to be more vocal in addressing investor concerns and stabilizing the company’s performance.
The Tesla endorsement comes at a time when the Trump administration has publicly defended the company. Last week, Trump held a showcase of Tesla vehicles at the White House, calling Musk “an American success story”. The administration has also pledged to investigate Tesla critics and protesters, with Attorney General Pam Bondi suggesting that those involved in anti-Tesla demonstrations could face legal consequences.
Trump further reinforced his support for Musk by stating on social media that those caught sabotaging Tesla vehicles could face up to 20 years in prison.
Despite the political backing, Tesla’s financial struggles remain a central concern for investors. The stock has sharply declined from a December peak of around $480 per share, and analysts warn that continued uncertainty could further impact its valuation.
With input from the Washington Post and Axios.
