Shares of Tesla have taken a hit, dropping over 9% after reports showed that sales in the EU and UK fell nearly 50% in January. This decline has pushed Tesla’s market value below $1 trillion for the first time since November 2024.
The company faces tough competition in Europe, especially from Chinese brands like BYD. While overall electric car sales in Europe rose by more than a third, Tesla’s numbers plummeted 45% across the EU, EFTA, and the UK. In the EU alone, the drop was more than 50%. This slump follows a trend from last year when Tesla’s sales fell for the first time in over a decade, largely due to rising competition.
AJ Bell’s investment director, Russ Mould, noted that the main reason for the sales fall appears to be increased competition. BYD, for instance, has been attracting buyers by including desired features as standard, which are extra in other brands. Mould also pointed out that some consumers might be making a “principled stand” against Elon Musk’s political actions, suggesting these issues could be influencing buyer decisions.
Musk has stirred controversy in the US by reducing development funds and opposing federal financial support. In the UK, he has been associated with far-right politics, supporting jailed activist Stephen Yaxley-Lennon, known as Tommy Robinson, and criticizing Prime Minister Sir Keir Starmer. His ties to the far-right AfD party in Germany have also raised eyebrows.
A former senior director at Tesla commented that Musk’s polarizing image is one of several factors behind the share price drop. They expressed that his recent political moves and public antics, like appearing on TV with a chainsaw, aren’t doing him or his brand any favors. While Musk might gain support from a specific group, they aren’t necessarily the types of consumers buying Teslas.
After the US election, Musk’s close ties to Donald Trump initially boosted Tesla’s shares as investors anticipated favorable conditions for the company. However, Trump’s position against electric vehicles raises questions about the lasting benefits for Tesla, with Mould remarking on the misalignment of investor expectations.
Overall, anxiety about interest rates and potential tariffs could also be contributing to the market’s cautious attitude towards Tesla. With increasing competition and shifting political landscapes, Tesla’s road ahead may be more challenging than anticipated.
Check out this related article: Unlocking Insights: Comprehensive Results for the Full Year 2024
Source link