Tesla Shares Fall as Sales Crash in Europe

Tesla cars recharge at a Tesla Supercharger station in San Francisco on Feb. 15, 2023. Justin Sullivan/Getty Images

Shares of electric vehicle manufacturer Tesla are trading in the red following a report showing the company’s sales in Europe almost halving year over year.

Tesla shares were trading at around $291 as of 2:00 p.m. EST on Wednesday, down 3.68 percent for the day, according to Bloomberg. On Tuesday, the stock fell by more than 8 percent. A Feb. 25 report from the European Automobile Manufacturers’ Association showed that Tesla sold 9,945 units in January in the European Union, the European Free Trade Association, and the United Kingdom, which was down 45.2 percent from January 2024.

Sales of Tesla vehicles in the EU tumbled by more than 50 percent. The decline happened even as overall new electric vehicle sales rose by 34 percent last month on an annual basis in the European Union.

With shares crashing, Tesla’s market capitalization fell below the $1 trillion level—the first time this has happened since around mid-November.

Despite Tesla’s market capitalization dropping below $1 trillion to about $914 billion as of Wednesday, it continues to be way above other major American auto manufacturers.

For instance, Ford’s market cap is around $38 billion, and General Motors‘ is roughly $46 billion, according to Bloomberg data.

So far this year, Tesla’s shares have dropped by more than 27 percent. The company revealed early last month that vehicle deliveries fell in 2024.

Tesla reported delivering 1.79 million units last year, down from around 1.81 million in 2023. This was the first dip in deliveries over the past nine years.

The lower deliveries led Truist Securities to lower its price target for Tesla’s stock. It anticipates the average selling price of Tesla vehicles to “continue facing downward pressure.” Truist expects “Tesla will continue to flex pricing to stimulate demand.”

Future Plans

In a recent shareholder deck, Tesla said that “plans for new vehicles, including more affordable models, remain on track for the start of production in the first half of 2025.”

“These vehicles will utilize aspects of the next-generation platform as well as aspects of our current platforms and will be produced on the same manufacturing lines as our current vehicle line-up,” the company said.

“This approach will result in achieving less cost reduction than previously expected but enables us to prudently grow our vehicle volumes in a more capex-efficient manner during uncertain times.”

Meanwhile, Tesla has scheduled “volume production” for its Cybercab robotaxi product starting in 2026. The robotaxi is aimed at transporting people autonomously and won’t have pedals or steering wheels.

“You could fall asleep and wake up at your destination,” Musk said last year.

According to a Jan. 30 post by financial services company Hargreaves Lansdown, there is “growing optimism” around Tesla’s upcoming affordable model and full self-driving feature, both of which can fuel the company’s growth.

“The near term is very much about keeping things ticking along, while the investment case lies firmly in the products set to be released later this year and beyond,” it said.

“It’s notoriously hard to make profitable EVs, and even harder to generate free cash flow doing so. Tesla can do both, which gives it a serious edge over competition.”