/EV%20charging%204%20by%20Choochart%20Choochailkupt%20via%20iStock.jpg)
The trade war between the U.S. and China has escalated, and monetary policy remains tight, with interest rates still elevated. Electric vehicle (EV) companies are capital-intensive by nature. They rely heavily on cheap borrowing to fund their operations and scale production. High interest rates make that tricky. Plus, customers are less likely to splurge on a new car when financing costs are steep.
Accordingly, Tesla (TSLA) has taken a beating. The poster child of the EV world has fallen from grace in 2025 due to CEO Elon Musk’s involvement in politics and a general cooldown in enthusiasm.