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Tesla Shares Drop as European Sales Plummet.Tesla’s stock plunged over 9% after European and UK sales declined nearly 50% in January, bringing the company's valuation below $1 trillion for the first time since November 2024. The electric carmaker faces increasing competition from Chinese manufacturers, particularly BYD, which offers standard features that Tesla charges extra for. While overall European electric vehicle sales grew by more than a third in January, Tesla saw a 45% drop across the EU, EFTA, and the UK, with EU sales alone falling over 50%. This follows Tesla’s first annual sales decline in more than a decade, as demand wanes and rival automakers gain ground in the growing EV market. Some analysts suggest Tesla’s struggles may also stem from Elon Musk’s political controversies, which have alienated potential buyers in both the US and Europe. Musk has drawn criticism for his support of the far-right AfD party in Germany, as well as his backing of jailed UK activist Tommy Robinson and his opposition to Prime Minister Keir Starmer. Former Tesla executive Peter Bardenfleth-Hansen said Musk’s political affiliations may be harming Tesla’s image, noting that his growing far-right fanbase is "not the audience buying Teslas.” Investors initially saw Musk’s ties to US President Donald Trump as a positive for Tesla, but Trump's opposition to EV expansion casts doubt on how Tesla will benefit from his administration. Market concerns over interest rate uncertainty and Trump's proposed tariffs on foreign automakers may also be contributing to Tesla’s stock decline. With rising competition and Musk’s political entanglements, Tesla faces growing pressure to stabilize its brand and regain consumer trust in key markets.
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