(qlmbusinessnews.com . Fri 28th Feb, 2025) London, UK —
Tesla Shares Plunge as European Sales Halve in January
Tesla’s stock value has taken a significant hit, plummeting by more than 9% after European and UK sales saw a sharp decline of nearly 50% in January.
This downturn pushed Tesla’s market capitalisation back below the $1 trillion mark for the first time since November 2024. The electric vehicle (EV) giant has been grappling with mounting competition from Chinese manufacturers and other automakers, which have rapidly expanded their market presence across Europe.
Industry analysts suggest that Tesla’s struggles in the region stem from a combination of factors. While the European electric vehicle market grew by over a third in January, according to the European Automobile Manufacturers’ Association (ACEA), Tesla’s sales across the EU, EFTA, and the UK nosedived by more than 45%, with an even steeper decline of over 50% in the EU alone.
The decline follows a difficult 2023, during which Tesla recorded its first annual sales drop in more than a decade, as consumer demand weakened and rival manufacturers gained ground.
According to Russ Mould, investment director at AJ Bell, the biggest challenge Tesla faces is the intensifying competition, particularly from Chinese automaker BYD. The firm’s EV models often come with premium features as standard, which Tesla offers only at an additional cost.
Mould also suggested that some consumers might be opting against Tesla due to CEO Elon Musk’s increasingly controversial political stances. Musk has been a vocal supporter of far-right figures in both the UK and Germany and has drawn criticism for his stance on US federal funding cuts and his close ties to former US President Donald Trump.
Former Tesla executive Peter Bardenfleth-Hansen, speaking to the BBC’s Today programme, stated that Musk’s political actions could be a contributing factor to Tesla’s share price drop. He noted that while Musk may have gained a following among a niche political audience, “they’re not the ones buying Teslas or investing in his company.”
While some investors initially expected Musk’s relationship with Trump to benefit Tesla’s business prospects, the president has repeatedly criticised electric vehicles and vowed to roll back policies aimed at increasing EV adoption.
Market uncertainty surrounding interest rate cuts and concerns over Trump’s proposed tariff plans may also be fuelling Tesla’s stock decline.
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