Tesla Stock Hits a Low as European Sales Plunge and Rival EVs Surge

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Tesla’s stock fell on Tuesday after a new report revealed a significant decline in demand in Europe, with January sales plummeting by 45%. According to the European Automobile Manufacturers’ Association, Tesla registered only 9,945 EVs in Europe, down from 18,161 last January. While overall EV sales grew by 37.3%, Tesla’s performance lagged behind the market, with Germany, the UK, and the Netherlands seeing the most growth in EV sales.

Tesla’s stock closed down 8.4% on Tuesday, marking a 25% drop for the year, and its market cap dipped below $1 trillion. Analysts suggest that part of the sales slump could be due to the Model Y undergoing a refresh, prompting customers to hold off on purchasing until the updated version is available. Additionally, strong competition from automakers like Volkswagen, Renault, and China's SAIC Motor likely contributed to the decline.

The report comes amid growing concerns about Elon Musk’s political involvement in Europe, particularly his support for Germany's far-right Alternative for Germany (AfD) party, which has sparked controversy. Musk has also been criticized for making a gesture at a political rally in the U.S. that was seen by some as a Nazi salute, a claim he denied. His call to jail UK Prime Minister Keir Starmer has further complicated his image in Britain.

Tesla’s January sales data also revealed sharp drops in Germany (down nearly 60%), France (down 63%), Norway (down 38%), and the UK (down 12%). While these declines are partly attributed to Musk's actions, European and Chinese competitors like BYD and Geely have introduced strong new models, affecting Tesla’s sales.

Oppenheimer analyst Colin Rusch noted that Musk’s political activity could worsen Tesla's performance in key markets like California and the broader EU, where the company has seen ongoing declines since 2023. However, Wedbush analyst Dan Ives downplayed the concerns, suggesting Musk’s political actions may not have a major impact on Tesla’s brand for now.

Tesla is expected to release its first-quarter production and delivery numbers in early April, which will provide more insight into the company’s sales trends.

Paraphrasing text from "Yahoo!Finance" all rights reserved by the original author