London, United Kingdom – Tesla, the electric car maker, experienced a more than 9% decrease in its stock prices following a significant drop in sales in the European Union and the United Kingdom in January. This decline caused Tesla’s valuation to fall below $1 trillion for the first time since November 2024. The company has been grappling with intensified competition in the European market, particularly from Chinese automakers and other competitors. Analysts suggest that Elon Musk’s controversial political activities in both Europe and the United States have also contributed to the company’s challenges.
Unlike the upward trend in electric car sales in Europe, where sales increased by over a third in January according to the trade body Acea, Tesla experienced a substantial decline of more than 45% in sales across the EU, EFTA, and the UK. The fierce competition in the market, particularly from Chinese manufacturer BYD, has posed a significant challenge for Tesla. BYD’s inclusion of certain features as standard, which are typically optional extras from other manufacturers, has fueled its success in the electric car market.
One of the factors potentially influencing the drop in Tesla’s sales could be attributed to Elon Musk’s political engagements and controversial statements. Musk’s association with far-right figures in the UK and Germany, as well as his involvement in polarizing political discussions in the US, might be turning off potential buyers. Musk’s public alignment with certain political ideologies could be alienating a segment of consumers, impacting Tesla’s sales negatively.
Furthermore, market analysts speculate that Musk’s close relationship with former US President Donald Trump may have initially boosted Tesla’s shares but could now be a liability. Trump’s unfavorable stance toward electric vehicles and potential tariff plans have raised concerns among investors. The uncertain interest rate environment and Trump’s policy decisions could be contributing to Tesla’s recent struggles in the market.
As Tesla grapples with declining sales and stock prices, the company may need to reassess its strategies to regain momentum and appeal to a broader consumer base. Musk’s political affiliations and the competitive landscape in the electric car market pose challenges that Tesla needs to address effectively to secure its position in the industry.