Tesla’s stock took a significant hit on Tuesday, with the company’s market value dropping below $1 trillion.
This setback came after disappointing sales figures from Europe and the growing political involvement of CEO Elon Musk.
Struggling European Sales Hurt Tesla’s Performance
Tesla’s European sales figures were much lower than expected, with the company selling fewer than 10,000 units last month.
This marked a nearly 45% drop from the same period a year earlier, which has caused some serious concern among investors.
Major Loss for Tesla’s Market Value
The results from the European market and Musk’s political ventures sent Tesla’s stock tumbling.
Shares fell by 8.4%, dropping to $302.80, and this decline wiped out $89 billion from the company’s market value in a single, painful session.
Musk’s Political Involvement Adding to Tesla’s Challenges
Elon Musk has become increasingly involved in U.S. politics, taking on a high-profile advisory role within President Donald Trump’s administration, focusing on slashing government spending.
In addition, Musk has expressed strong support for far-right leaders in Europe, particularly in Germany’s recent elections.
This political alignment has sparked backlash from some European politicians, further complicating Tesla’s brand image abroad.
Investors Worry About Tesla’s Future in Europe
“Tesla is clearly facing challenges in Europe, and Musk’s political involvement is only adding to the company’s troubles,” said Dan Ives, an analyst at Wedbush Securities.
He estimated that between 10% and 15% of these difficulties could be attributed to the negative impact of Musk’s public persona in Europe.
European Sales Decline Highlights International Concerns
Despite a surge in Tesla’s stock following the 2024 U.S. presidential election, where investors hoped Musk’s close relationship with Trump would benefit his businesses, the disappointing European sales have dampened that optimism.
The concern is that what works in the U.S. may not translate well to Tesla’s performance in other markets.
Tesla Faces Competition in Key Global Markets
On top of these issues in Europe, Tesla is also facing increased competition from other automakers, particularly Chinese electric vehicle giant BYD.
In China, a crucial market for electric vehicles, BYD has announced it will roll out self-driving technology across nearly all of its models.
In response, Tesla recently revealed plans to offer advanced self-driving functions in its cars in China as well.
What Does the Future Hold for Tesla?
Despite these setbacks, many are still wondering whether Tesla will be able to overcome these challenges and remain a leader in the electric vehicle market.
What do you think? Will Tesla rise again or struggle in the face of fierce competition?