Tesla Europe’s sales dropped about 45% in the last month, lagging behind its Chinese rivals. EV maker stock tumbled by 8% following the release of a declined sales report in Europe on February 25. Tesla’s stock drop pushed its valuation below $1 trillion, marking the first time it’s been under that threshold since November 2024.
The European Automobile Manufacturers Association revealed that Tesla sales fell 45% in Europe, while overall EV sales in the region rose 37%. By Tuesday afternoon, Musk’s net worth had dropped nearly 4% to $365.3 billion, about $100 billion less than its peak of $464 billion on December 17, 2024, according to Forbes.
Tesla Europe Sales Decline as EV Market Surges
Tesla’s sales drop in Europe underscores the challenges following a decline in global sales in the last year. In January, sales went against the trend of rising electric car sales in Europe, which grew by over a third, according to trade body Acea. Instead, Tesla’s sales dropped more than 45% across the EU, EFTA, and the UK, with a more than 50% decline in the EU alone. This follows a drop in Tesla’s sales last year, the first in over a decade, as demand weakened and competitors gained ground.
AJ Bell investment director Russ Mould believes the main reason for the January slump is growing competition, especially from Chinese maker BYD, which offers features as standard that other companies charge extra for. CEO Elon Musk faces pressure to introduce more affordable models and the self-driving cars he believes are key to Tesla’s future.
Investors Lose Faith in Musk
Investors are concerned that Musk’s involvement in leading a drastic federal government downsizing for President Trump might distract him from Tesla and hurt its brand. Musk also runs SpaceX and other private ventures. However, Tesla supporters are optimistic about the company’s plan to launch an affordable electric vehicle and Musk’s promises to roll out a paid self-driving car service.
Tesla Stock Plunges
On February 25, Tesla’s stock dropped significantly, falling to $305 per share. This decline caused the company’s market value to dip below $1 trillion, marking a notable shift after a period of high growth. Despite Tuesday’s drop, Tesla shares are still up 51% over the past year, though they’re down 24% year-to-date.
Tesla’s stock is currently priced at 112 times its expected earnings, higher than its five-year average of 93, according to LSEG. In comparison, Ford’s stock is valued at just eight times earnings, and GM’s at seven.
