Tesla Stock Plunges 8.4% Amid Slumping European Sales and Rising Competition

Tesla (NASDAQ:TSLA) shares tumbled 8.4% on Tuesday, wiping its market cap below $1 trillion to $970.4 billion. The stock has dropped 18% year-to-date as the electric carmaker struggles with slowing European sales, rising competition, and CEO Elon Musk’s controversial public image.

New Tesla registrations in the EU, EFTA, and the UK plummeted 45.2% year-over-year in January to 9,945 units, cutting its market share from 1.8% to 1%, according to the European Automobile Manufacturers’ Association. While battery EVs gained traction in the region—rising to 15% market share from 10.9%—Tesla failed to capitalize.

Meanwhile, rivals surged ahead. Volkswagen (ETR:VOWG_p) grew sales 14.9%, Toyota (NYSE:TM) saw increased Lexus demand, and Renault (EPA:RENA) also posted higher sales. Chinese automaker SAIC Motor Corp Ltd (SS:600104) saw a 37% jump, holding a 2.3% market share—more than double Tesla’s.

Tesla’s decline reflects intensifying EV competition, an ongoing price war with Chinese brands, and slowing global demand. The company reported its first-ever annual decline in deliveries in 2024, fueling concerns over its growth trajectory.

Tesla bear Gordon Johnson called Q1 "an absolute disaster," while long-time Tesla bull Gene Munster attributed the 25% recent stock drop to investors adjusting 2025 delivery expectations, partially due to Musk’s polarizing presence. Wall Street estimates 2 million deliveries in 2025, but insider forecasts suggest 1.7 million.

Despite near-term headwinds, Munster expects a rebound in 2026 with Tesla’s lower-cost model launch. However, until delivery numbers align with investor expectations, Tesla’s stock could remain under pressure.