$21 billion at stake as political risk resurfaces alongside EV headwinds
As Tesla CEO Elon Musk moves to launch a third political party in an escalating feud with U.S. President Donald Trump, retail investors in South Korea—some of the company’s most loyal shareholders—are growing increasingly uneasy.
Musk’s latest foray into politics adds fresh uncertainty for a stock that has already endured a turbulent year, much of it tied to investor concerns about the billionaire’s political entanglements. Tesla shares, which had fallen by nearly half from their 2024 peak, had begun to stabilize before Musk’s latest political move revived worries over leadership focus and public perception.
South Korean retail investors, known locally as “Seohak ants” for their strong appetite for overseas equities, are particularly exposed. As of July 3, they held $21 billion worth of Tesla shares—more than any other foreign stock, according to the Korea Securities Depository. The next most popular holding, Nvidia, trails significantly at $13.6 billion.
Musk’s latest foray into politics adds fresh uncertainty for a stock that has already endured a turbulent year, much of it tied to investor concerns about the billionaire’s political entanglements. Tesla shares, which had fallen by nearly half from their 2024 peak, had begun to stabilize before Musk’s latest political move revived worries over leadership focus and public perception.
South Korean retail investors, known locally as “Seohak ants” for their strong appetite for overseas equities, are particularly exposed. As of July 3, they held $21 billion worth of Tesla shares—more than any other foreign stock, according to the Korea Securities Depository. The next most popular holding, Nvidia, trails significantly at $13.6 billion.
Despite the volatility, Korean investors have continued to buy. Between June 5 and July 4, Tesla and a related leveraged ETF, TSLL—which aims to deliver twice the daily return of Tesla stock—ranked as the top two foreign stock purchases by Korean individuals. Combined inflows reached $5.5 billion, surpassing the 6.6 trillion won (~$4.8 billion) invested in Samsung Electronics shares over the same period.
South Korea’s National Pension Service (NPS) also maintains a significant indirect stake, holding more than 5.3 million shares as of March. At current valuations, the stake is worth an estimated 2.3 trillion won (~$1.7 billion).
Since last November’s U.S. presidential election, Tesla stock has tracked the arc of Musk’s political relationship with Trump. Following Trump’s victory, shares soared to an all-time high of $463 in mid-December on speculation that the two might collaborate. But tensions rose sharply after Musk was appointed to lead the newly formed Department of Government Efficiency (DOGE), prompting a public rift with the White House.
By April, Tesla had fallen to $221, only to recover to the $300s before another round of public name-calling between Musk and Trump triggered a single-day drop of more than 14%.
While politics continues to dominate headlines, analysts say deeper structural concerns are at play. Tesla’s core electric vehicle business is showing signs of strain amid slowing global demand, intensifying competition, and a pullback in government subsidies, particularly in the U.S. and Europe.
J.P. Morgan analyst Ryan Brinkman recently cut his price target to $115, citing disappointing results and mounting macroeconomic pressure. That forecast implies a 63% downside from the July 4 closing price of $315.35.
[Kim Eun-jung]
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