Tesla Shares Drop as Regulatory Risks Mount Following Shifts in Political Control

Tesla faces heightened valuation and regulatory scrutiny across its key growth drivers following shifts in Congressional and Texas political leadership. The selloff drove shares down 11.14% after an initial 9.1% drop to $350.18, leaving the stock about 30% below its 52-week high. Investors fear regulatory hurdles targeting robotaxi rollouts, AI data centers, and a proposed Tesla-SpaceX merger. Concurrently, an aggressive $20 billion annual capex cycle and $2.76 billion in R&D spending reduced quarterly operating income to $718 million and cut free cash flow by 61.63%, despite robust active FSD subscriptions reaching 1.74 million.