Tesla's value drops below $1 billion as sales plummet in Europe

Tesla is falling more than 8% on Wall Street to $303 after it was reported that the brand's sales plunged 50% in Europe in January.

The brand's market capitalization has fallen below $1 trillion to around $985 billion.

Shares have already fallen 14% in the last five sessions.

“Tesla’s European dreams are being held back as January sales plunge,” said Steve Man, an analyst at Bloomberg Intelligence, noting that the brand “is facing competition and Elon Musk controversies.”

In the final stretch of 2024, Tesla's shares soared after the election of Donald Trump, with investors believing that the friendship between the businessman and the new president would facilitate the regulatory environment for the company that wants to invest in autonomous cars.

The stock peaked in December but has been falling with falling sales and Elon Musk's focus on politics in the US (he leads DOGE, a department that is making cuts to the country's public sector) and also in Europe (where he supports the German far right).

Tesla is indeed the biggest loser among the Magnificent Seven.

Tesla sales plunged 50% in European Union (EU) countries in January compared to the same period last year, the European Automobile Manufacturers Association (ACEA) revealed today.

From more than 15,000 units sold a year ago, Elon Musk's brand saw sales drop to around 7,500 units.

This collapse comes at a time when the importance of electrified cars is increasing, and significantly so in Europe.

In the overall market, sales fell by almost 3%, with falls of 6% in France and Italy and 3% in Germany, with Spain recording a rise of 5%.

Combustion cars saw their market share drop by almost 10 points in the space of a year, now accounting for 39% of the market.

Electrified vehicles now account for more than 60% of the market.

Looking at other manufacturers, Volkswagen group sales rose 6%, Stellantis fell 18%, Renault group sales rose 5%, Toyota group sales fell 5%, BMW group sales fell 1%, Mercedes-Benz sales fell more than 6%.

Sales of 100% electric vehicles grew 34% in January, with a 15% market share, with growth in Germany (+53%), Belgium (+37%) and the Netherlands (+28%) standing out.

Sales of electric hybrids rose 18%, with a share of 35%, with growth in the four largest markets: France (+52%), Spain (+23%), Germany (+14%) and Italy (+11%).

Sales of plug-in hybrids fell 8%, accounting for 7% of the total market, with falls of 66% in Belgium and 54% in France.

Sales of gasoline cars fell by 19%, with falls in all markets, particularly in France (-28%), Germany (24%), Italy (-17%) and Spain (-11%).

Market share fell from 35% to 29% in the space of a year.

Diesel cars fell by 27%, now occupying a 10% share.

As JE wrote on February 21 , the falls recorded in January (sales in some markets were still only known) reflect Tesla's 10% drop in the European market in 2024.

Several factors are weighing on the brand: European and Chinese competition is gaining momentum; Tesla models are aging; the end of checks for electric cars in several countries is not helping (but the rest of the market is not affected); analysts consulted by JE point out that Musk's political positions in Europe (such as support for the far right in Germany) are also weighing on sales.