Not long ago, the media seemed to be in tune, runningstories about how Elon Musk's Tesla was one of the biggest beneficiaries ofDonald Trump's victory in the U.S. presidential election.Initially, this sentiment appeared to be true: Tesla stock rose astaggering 90% between November 5 and mid-December, despite the lack ofcompelling fundamental reasons behind this rally. Investors apparently believed the company's future wassecure with a powerful ally in the White House. Regulatory scrutiny? A thing ofthe past, with the hope that Tesla's trajectory would be upward from then on.However, the optimism was short-lived. Since December 17,Tesla shares have plunged nearly 37%, and there is little sign of a turnaroundin the trend. Ironically, investors have Elon Muskhimself to thank for this plunge.His decision to dive headlong into U.S. politics, becomingnot only a highly visible figure, has alienated a portion of the public, bothin the U.S. and abroad. For some, Musk and his products have becometoxic. The impact is already evident. In January, Tesla vehiclesales in Europe plummeted by a staggering 45%. The company only sold 9,945 carsin the region, down from 18,161 in the same month of 2024.Another growing concern among investors is Musk's involvement withthe Department of Government Efficiency, whichis seen as a potential distraction, pulling his attention away from Tesla.To make matters worse, Tesla's challenges go beyond publicrelations. Geopolitical tensions between the U.S. and Europe could escalatefurther, posing an additional threat to the company. A key factor in this equation is the so-called EUAnti-Coercion Instrument, a regulation passed at the end of 2023. This lawallows the EU to retaliate against third countries - such as the United States- that attempt to exert pressure on European policy through trade restrictions.In this framework, the EU can impose countermeasures oncompanies and individuals accused of instigating such actions. If the U.S.increases tariffs on European products, Tesla could be in the crosshairs.Even if geopolitical tensions do not escalate further,Tesla faces fierce competition. The company is losing market share to competitiveChinese EV manufacturers and traditionalautomakers. Once considered an industry pioneer with littlecompetition, Tesla is now facing well-established automotive giants that havecaught up in both technology and production scale.What does the continued decline in Tesla's stock mean forTesla? If the downward trend persists, the company's financialproblems could send shockwaves through the broader stock market. In aworst-case scenario, this could turn into what Nassim Taleb would call a true“black swan” event: unexpected, disruptive, and with profound consequences. This article was written by FL Contributors at www.forexlive.com.