Tesla’s sales in Europe collapsed by 45% in January, even as demand for electric vehicles surged across the continent, according to a report from the European Automobile Manufacturers’ Association.
The Elon Musk-led company registered just 9,945 cars last month, down from 18,161 a year ago. The Association pointed out that Musk’s political involvement is becoming a problem for Tesla in Europe.
Polls in Germany and the UK show that his support for far-right parties and attacks on political leaders are turning buyers away.
Unlike the US, where Tesla’s brand is deeply tied to Musk’s influence, European consumers are less forgiving of his shenanigans.
Though the sales slump isn’t just about politics. Tesla is revamping its Model Y production lines, which has led to inventory shortages in certain markets.
That alone could explain part of the decline in registrations, but it doesn’t account for the fact that rival EV makers are thriving in the same conditions, said the Association.
Tesla stock crashes after post-election surge fades
Meanwhile, Tesla’s stock also plunged over 8% on Tuesday, wiping billions off its market value and dragging it below the $1 trillion mark, according to data from Google Finance.
Tesla has now lost 25% of its value since the beginning of the year, making it one of the worst performers among major tech stocks.
Clearly, investors aren’t buying Tesla’s rebound story anymore. After a brief rally following Donald Trump’s election victory, Tesla’s stock has erased all gains.
The shares have plummeted 35% since December 16, while the Nasdaq is down just 1.5% in the same period.
Musk’s personal wealth has taken a hit as well. His net worth has plunged by more than $100 billion, though he still holds the title of world’s richest person, with $380 billion to his name.
Tesla’s China ambitions hit a wall
TSLA’s latest slide was triggered by a Reuters report on Monday, which revealed that Tesla’s long-awaited “navigate on city streets” feature in China was a disappointment.
Owners who tested the partially automated driving update found that it failed to meet Musk’s promises. The backlash piled onto Tesla’s growing list of challenges in China, where it is already struggling to keep up with local competitors.
Musk’s battle to expand Tesla’s self-driving technology in China is at a standstill too, as the company has been unable to secure regulatory approval due to escalating trade tensions between China and the US.
According to Musk, Chinese authorities won’t allow Tesla to move its training data out of the country, while the US has banned Tesla from processing that data inside China.
That standoff has frozen Tesla’s Full Self-Driving (FSD) expansion in China, making it a bargaining chip in trade negotiations between Beijing and Washington. Tesla’s reliance on China is now a liability.
China was once Tesla’s fastest-growing and most profitable foreign market, but now it’s slipping away. BYD has overtaken Tesla with a 35% market share in China, while Tesla’s share has shrunk to just 7%.
The company’s Shanghai gigafactory, once seen as a breakthrough, has now helped Chinese competitors scale faster than Tesla expected.
Tesla recalls over 376,000 vehicles over power steering failures
As if falling sales and stock crashes weren’t enough, Tesla is now dealing with a massive recall in the US. The company is recalling 376,241 Model 3 and Model Y vehicles built between February 28, 2023, and October 11, 2023, according to the US National Highway Traffic Safety Administration (NHTSA).
The recall is reportedly due to a critical flaw in Tesla’s power-assisted steering system. Tesla told regulators that printed circuit boards in affected vehicles can become overstressed, which can cause power steering to fail when a car stops and then accelerates again.
The issue forces drivers to use extra force to steer, increasing the risk of accidents. Tesla claims there are no known crashes, injuries, or deaths related to the defect and says an over-the-air software update will fix it.
But all in all, Tesla’s long-running battle with US regulators has taken a turn, thanks to Musk’s new role in the Trump administration.
Trump recently appointed Musk to lead a team focused on shrinking the federal government workforce, which has already led to major cuts at the NHTSA—the very agency investigating Tesla’s Autopilot and Full Self-Driving (Supervised) systems, a connection that Democratic critics like Senator Elizabeth Warren were quick to point out.
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