“some Tesla owners say they are reconsidering their loyalty to the brand” https://t.co/bOLfQazQqV
— Matthew Yglesias (@mattyglesias) February 24, 2025
Tesla’s market value dropped below $1 trillion on Tuesday after data showed the company’s sales in Europe fell sharply in January. According to the European Automobile Manufacturers Association, Tesla’s sales in Europe were down 45% compared to the same period last year, while overall electric vehicle sales in the region jumped 37%. The sales decline highlights the challenges Tesla faces following a dip in global deliveries last year.
„Shares in electric car maker Tesla have slumped more than 9% after EU and UK sales fell by almost half in January” https://t.co/IpfDFrf9Wa
— Bertold Kittel (@Bertold_K) February 25, 2025
This has put pressure on CEO Elon Musk to introduce lower-priced models and the autonomous cars he says will be crucial to Tesla’s future. Tesla’s shares fell 8% to $305, leaving the company with a market capitalization of $981 billion. This is still more than twice the combined value of General Motors, Ford, Volkswagen, Toyota, Hyundai, and BMW.
.@elonmusk’s behaviour could prove almost Gerald Ratner-like in the damage to his automotive brand https://t.co/LaHE9Laj3w
— Matt Western MP 🌹 🇬🇧🇨🇦 (@MattWestern_) February 25, 2025
Some investors worry that Musk’s role in overseeing major changes to the federal government at the request of President Donald Trump may be distracting him from his duties at Tesla and hurting the company’s brand appeal to some consumers.
Tesla faces European sales challenges
Musk also leads the privately held space rocket company SpaceX and other private businesses.
Art Hogan, chief market strategist at B.
Tesla now has one thing left to do on this list pic.twitter.com/aSf6TxG5OF
— Sawyer Merritt (@SawyerMerritt) February 25, 2025
Riley Wealth in Boston, said, “He’s a very hands-on operator, and if you’re spending that much time in an office in the White House, how much time are you spending running all of your other companies, including the one that’s publicly traded?”
Concerns about potential over-investment in artificial intelligence (AI) are also affecting Tesla, Microsoft, and Meta Platforms ahead of AI chip maker Nvidia’s quarterly report on Wednesday, according to Hogan. Tesla’s stock recently traded at 112 times expected earnings, higher than its five-year average of 93, based on data from LSEG.
In comparison, Ford’s stock is valued at eight times earnings, and GM’s is at seven. Tesla supporters point to the company’s plans to launch a new, more affordable electric vehicle and Musk’s promises to introduce a paid self-driving car service. Despite Tuesday’s drop, Tesla shares are still up 51% over the past 12 months.
However, the stock is down 24% year-to-date.
