As investors processed poor European sales and CEO Elon Musk’s aggressive political excursion, shares of the US electric vehicle pioneer Tesla fell Tuesday, bringing the company’s market value below $1 trillion.
previous month, the car manufacturer sold fewer than 10,000 cars in Europe, a 45 percent decrease from the same period previous year.
During a brutal session, Tesla’s stock dropped 8.4% to $302.80, removing $89 billion from its market worth.
In the administration of US President Donald Trump, Musk has assumed a prominent advising position and is tasked with cutting government expenditures.
He has also voiced strong support for far-right political leaders in Europe — including in the recent German elections — sparking criticism from some European politicians.
“Tesla is clearly facing challenges in Europe and the Musk brand issues are adding to the headwinds,” Wedbush Securities analyst Dan Ives told AFP in a message, estimating that between 10 and 15 percent of these headwinds were down to anti-Musk behavior.
Following the US presidential election in 2024, investors bet that Musk’s closeness to Trump would help his businesses prosper, and as a result, Tesla’s share price soared.
At least for the time being, the low sales numbers in Europe seem to have dashed that hope and sparked worries that what might be well-liked in the US might really be bad for the company’s success elsewhere.
Musk’s political views in Europe and Germany are “not the best thing for Tesla sales,” Ives said, adding: “It’s like putting mustard on a slice of pizza.”
Alongside its European struggles, Tesla also faces stiff competition from automakers like BYD in China — a key market for electric vehicles.
Earlier this week, the company announced it would start offering advanced self-driving functions for its cars in China, shortly after BYD said it would introduce self-driving technology for nearly all its vehicles.
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