Tesla’s Valuation Dips Below $1 Trillion Amid European Sales Slump
Tesla, the electric vehicle giant, has seen its market valuation fall below the $1 trillion mark following disappointing sales figures from Europe. The company’s stock price dropped 8% after reports revealed a 45% decline in European sales compared to January 2024.
Analysts point to CEO Elon Musk’s recent activities as contributing factors to the stock’s downturn. Musk’s involvement with cryptocurrency Dogecoin (DOGE) and his political engagements have raised concerns among investors. In Europe, Tesla has faced protests and vandalism incidents, reportedly linked to Musk’s political stances.
The stock’s performance has had a significant impact on Musk’s wealth, with his net worth decreasing by $130 billion. Despite this substantial loss, Musk retains his position as the world’s wealthiest individual.
Tesla is also grappling with intensified competition, particularly from Chinese electric vehicle manufacturers. BYD’s recent announcement of free advanced self-driving technology has put additional pressure on Tesla’s market position. In response, Tesla is accelerating the rollout of its driving assistance features in China.
Dan Ives, a prominent analyst, noted that Musk’s role in the DOGE department under the Trump administration has influenced Tesla’s stock performance. Additionally, Musk’s support for Germany’s far-right AfD party has sparked protests and vandalism at Tesla locations in Europe and the United States.
Gene Munster, another industry expert, attributes the decline in sales partly to Musk’s increased political visibility. Wall Street expectations for Tesla deliveries have been revised downward from 2 million to approximately 1.7 million, with a projected year-on-year decline of 4%.
Deutsche Bank reports a 12.1% decline in Tesla sales across key markets. Competitors are seizing the opportunity, with Polestar offering substantial discounts to Tesla owners, viewing Musk’s political activities as a potential advantage.
As of now, Tesla has not issued an official comment on these developments. The company faces the challenge of navigating a competitive landscape while managing the impact of its CEO’s public profile on its market performance.
