Baillie Gifford has significantly reduced its stake in Tesla to an all-time low, following calls from a major shareholder for CEO Elon Musk to step down.
The Edinburgh-based investment firm, which first invested in Tesla in 2013 and has long supported Musk’s ventures, has now cut its holdings to just 0.06% of the company’s shares, including its investment trusts, according to a spokesperson.
A Baillie Gifford representative told City AM that the company faced challenges as Tesla’s valuation surged by over $500 billion at the end of 2024 without any substantial business developments.
Following the U.S. election, Tesla’s stock soared 120% in two months, reaching a peak valuation of $1.7 trillion. However, it has since plummeted more than 50%, dropping to $728 billion and wiping out all gains made since October.
Mamta Valechha, a consumer discretionary analyst at Quilter Cheviot, noted that such a rapid global decline in brand value is unprecedented in the automotive industry.
Analysts attribute the downturn to leadership distractions, declining brand perception, and weak sales figures, with concerns over Musk’s political involvement and work with the U.S. government further impacting sentiment.
Tesla’s sales have fallen worldwide, with European sales dropping 45% in January, despite the broader electric vehicle market growing by 37%. Protest actions against the brand have emerged globally, including sales boycotts, vandalism, and efforts to obscure or replace Tesla logos.
The news follows calls from Ross Gerber, one of Tesla’s early investors, for Musk to step down, arguing that his leadership has become unfocused and increasingly divisive.
