Tesla’s stock plunged more than 8% on Tuesday, marking another setback for the electric vehicle giant as it struggles to maintain momentum in 2025.
The company’s stock hit its lowest level since November, driven by disappointing sales in Europe and growing concerns over CEO Elon Musk’s controversial political moves. Tesla shares (Nasdaq:TSLA) are now down roughly 25% this year, making it the weakest performer among the “Magnificent 7” stocks, according to Investopedia.
The company’s valuation also dipped below $1 trillion for the first time in three months, as reported by MarketWatch.
Why Tesla shares are down this week
A key factor in Tesla’s stock slump is a sharp decline in European sales. The company’s vehicle sales plummeted 45% across Europe last month, even as overall electric vehicle demand surged, according to the Wall Street Journal. Tesla’s monthly sales in Germany, for instance, fell 60% year-over-year to 1,277 vehicles, per data from Germany’s Motor Transport Authority.
Meanwhile, competitors such as Volkswagen, Renault, and SAIC Motor saw increased sales, capitalizing on growing EV interest in countries like Germany, the UK, and the Netherlands.
Musk’s vocal political involvement in Germany’s recent election may have also contributed to Tesla’s struggles. His support for the far-right Alternative for Germany (Afd) party sparked backlash, potentially alienating customers in a key market.
Additionally, Tesla’s Model Y is currently undergoing a refresh, leading some buyers to delay purchases while waiting for the updated model, according to WSJ.
Beyond sales figures, Tesla faces growing concerns about its reputation. Some critics have argued that Musk’s leadership outside of Tesla, particularly his role in running the Trump administration’s Department of Government Efficiency (DOGE), is damaging the company’s image.
On February 15, protestors gathered at Tesla stores and charging stations in cities across the United States to condemn Musk’s cuts to essential services and mass layoffs related to his work with DOGE.
Despite Tesla’s recent challenges, Europe’s broader EV market remains strong, with overall electric vehicle sales rising 37.3% last month. Germany, the UK, and the Netherlands are seeing the biggest gains in sales, according to Yahoo Finance. What’s clear is that Tesla investors are increasingly anxious this week as competitors continue to chip away at its dominance in the industry.
No comments