### Tesla Stock Retreats After Post-Election Surge

Tesla shares experienced a notable pullback today after enjoying a significant rise following last week's election of Donald Trump. The electric vehicle giant saw its stock decrease by 5% as of 2:56 p.m. ET, aligning with a broader market sell-off. The S&P 500 itself faced its first decline since the election, adding to the overall bearish sentiment.

Although there wasn’t any major company-specific news for Tesla, Hertz Global's recent announcement highlighted ongoing challenges for the EV market. Hertz reported it would be selling 30,000 electric vehicles by the end of this year, reinforcing concerns about weaker-than-expected demand for EVs. Furthermore, J.D. Power projections indicated that the market would be further saturated with EVs coming off leases, estimating 65,600 by the end of this year and rising to 215,000 by 2026.

Investor sentiment appears to be reassessing Tesla’s valuation, especially after the stock soared nearly 40% in just four sessions post-election. The surge occurred without substantial new benefits to Tesla's business operations, prompting questions about the sustainability of the rapid rise.

Tesla's CEO, Elon Musk, has formed a close alliance with Trump, boosting investor confidence initially. However, the alignment may come with significant risks. Trump's campaign promise to eliminate tax credits for EVs, which can be worth up to $7,500 per vehicle, could detrimentally impact Tesla’s market share. Affordability remains a pressing issue, and losing such incentives would pose a challenge for Tesla.

There is optimism that the Trump administration might ease regulations around autonomous vehicles, potentially aiding Tesla's ambitions with its new robotaxi, the Cybercab. However, safety concerns and public perception remain critical hurdles. Any negative incidents involving autonomous vehicles could tarnish Tesla's reputation, especially if the company is perceived as receiving undue advantages from the government.

Despite the benefits Musk's relationship with Trump might bring, significant uncertainties linger, and Tesla’s stock trades at a high multiple. Should the expected benefits not materialize, the stock could face substantial declines.