- Tesla shares drop over 9% as EU and UK sales fall nearly 50%.
- Market valuation slips below $1 trillion for the first time since November 2024.
- Increased competition and Musk’s political controversies may be impacting sales.
Tesla’s stock tumbled over 9% after the electric carmaker saw its EU and UK sales drop by nearly 50% in January, marking a major setback in one of its key markets.
The sharp decline pushed Tesla’s market valuation back below $1 trillion for the first time since November 2024.
The company is facing increasing competition from Chinese automakers and other rivals, particularly as brands like BYD offer advanced features at lower prices.
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Meanwhile, CEO Elon Musk’s political controversies on both sides of the Atlantic could also be influencing buyer sentiment, analysts suggest.
While overall European electric vehicle (EV) sales surged by more than a third in January, Tesla’s numbers moved in the opposite direction, with sales across the EU, EFTA, and UK falling over 45%—and more than 50% in the EU alone, according to trade body Acea.
Tesla’s first annual sales decline in over a decade last year signaled growing challenges, as demand weakened and competition intensified. Russ Mould, investment director at AJ Bell, attributed Tesla’s January slump primarily to increased competition, with Chinese manufacturer BYD gaining traction thanks to cost-effective features.
However, Mould also suggested that some customers may be taking a “principled stand” against Musk’s political involvement.
Musk has drawn criticism for backing far-right political figures in the UK and Germany, while in the US, he has supported deep cuts to federal development funding.
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Tesla shares had surged after the US election, as Musk’s ties to Donald Trump led investors to believe his businesses would benefit.
But Trump has openly opposed electric vehicles, vowing to roll back policies promoting EV adoption—raising doubts about Tesla’s future prospects under a potential second Trump presidency.
Mould also noted that broader market uncertainty, including concerns over interest rate cuts and Trump’s proposed tariffs, may be contributing to investor unease.
