By johnathan 
Tesla Inc. (TSLA) has seen its market capitalization fall below the $1 trillion mark for the first time since November, following an 8% drop in its stock price on Tuesday. The decline is largely attributed to a significant reduction in European sales and concerns over CEO Elon Musk’s political engagements.
In January, Tesla’s European sales plummeted by 45%, with only 9,945 vehicles sold compared to 18,090 during the same period last year, as reported by the European Automobile Manufacturers Association. This downturn is particularly striking given the 37.3% increase in overall electric vehicle sales across Europe, which now account for 15% of the automotive market in EU countries. Consequently, Tesla’s market share in the region has decreased from 1.8% to 1%.
Analysts point to intensifying competition from Chinese manufacturers like BYD and SAIC Motor as a contributing factor to Tesla’s challenges in Europe. Additionally, Musk’s active involvement in political affairs, including his role in President Donald Trump’s administration and support for Germany’s far-right AfD party, has raised concerns among investors. Art Hogan, chief market strategist at B. Riley Wealth, remarked, “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?”
The stock’s recent performance reflects these concerns. As of February 26, 2025, Tesla’s shares are trading at $298.63, down 1.38% from the previous close. The stock has experienced a 37% decline from its peak in December, erasing approximately $570 billion in market value.
Despite these setbacks, some analysts remain optimistic about Tesla’s future. The company has plans to introduce a new, more affordable electric vehicle and has made promises regarding advancements in autonomous driving technology. However, the immediate outlook remains uncertain, with potential further volatility in the stock price as the company navigates these challenges.