By Tesla shares tumbled sharply on Tuesday as data showed the electric vehicle maker’s European car sales had fallen nearly half from a year ago.
Tesla sold 9,945 vehicles in January, marking a 45% plummet from the same period one year ago, according to the European Automobile Manufacturers’ Association. Tesla’s share of new car registrations in the region dropped from 1.8% to 1%.
Tesla’s sales performance was a dark spot in an otherwise bright EV market in Europe last month. Overall, new electric car sales jumped by 37.3% across the continent, capturing a 15% auto market share in European Union countries.
The news sent shares in Tesla by over 9.22% by Tuesday afternoon, with the stock trading at around $300 as of 3:12 p.m. ET. The stock pared losses to end about 8% lower at $302.80.
The move dragged Tesla’s market cap to $974 billion, putting it below the $1 trillion milestone it had been cruising above since November.
Signs had already emerged that Elon Musk's carmaker was struggling in Europe, as EU sales dropped 13% in 2024. Previous industry data showed that German sales plunged 41% last year. In January, only 1,277 new vehicles were registered last month in the country, Tesla's lowest monthly total since mid-2021, Bloomberg reported.
The rise of competitors and shifting sentiment around Musk's politics are likely fueling the stagnation in sales. SAIC Motor, a Chinese auto manufacturer, led the surge of car registrations across the continent, notching a 37% increase in January.
In a recent interview with Business Insider, Tesla bull-turned-skeptic Ross Gerber outlined that slowing sales could create longer-term pain for the stock. That's alongside other headwinds, such as a distracted CEO and the limits of the company's full-self driving technology.
Speaking with BI last week, Gerber noted the issues with sales was one of the reasons he saw a potential 50% decline in the stock this year, highlighting stiff competition from China's BYD, which is the top threat to Tesla's business outside the US.
"Xi has made it very clear that he wants Chinese tech and EV companies to succeed, not Tesla," Gerber said. "BYD is such a good company, everybody in the emerging markets are buying BYDs."
