Tesla in freefall: stock tanks as sales crash worldwide

Tesla shares tumbled more than 15% on Monday, suffering their worst single-day drop since 2020. The electric vehicle maker is grappling with plunging sales, and its valuation has been halved since December to roughly $700 billion (€640 billion).

The trend marks a dramatic reversal from the optimism that followed Donald Trump’s election victory. To help Elon Musk, the President said he would buy a Tesla as a promotion stunt.

It seems like Elon Musk is overplaying his hand. The sharp decline in Tesla sales reflects broader market concerns and company-specific challenges, the latter of which are primarily attributed to Musk’s political endeavors. However, it must be noted that tech stocks, in general, are facing headwinds due to pessimism about the US economy, founded on President Trump’s tariff policies. 

The only bright spot is the UK

Nevertheless, in key markets, the automaker is suffering from sagging sales. According to the China Passenger Car Association (CPCA), Tesla sold just 30,688 vehicles in China in February, down 49% year-over-year. This slump comes despite an 82% surge in the country’s broader market for new energy vehicles, which include EVs and hybrids. 

In the European market, Tesla also faces an unfavorable wind. Data from the European Automobile Manufacturers Association (ACEA) showed that the carmaker’s sales in the region have been cut in half since the beginning of the year, even as EV registrations climbed 34%.

The decline was particularly stark in Belgium and France, with sales falling 53% and 26% in February, respectively, despite a stable market in France – Belgium regressed overall by 8%. The United Kingdom was a rare bright spot, as sales rose nearly 21% last month.

The automaker is in a Model Y refresh, a transition that has slowed deliveries. There’s a shimmer of hope in the model change. Apparently, 200,000 orders have been registered for the refreshed Model Y in China. However, this could cool quickly once the hunger of early adopters has been satisfied, as happened with the Model 3 Highland. 

Tesla boycotts 

Beyond sales struggles, CEO Elon Musk’s increasingly controversial political affiliations appear to be weighing on its car brand. Musk has aligned himself with Trump and far-right European politicians, alienating some potential customers. 

Calls for a Tesla boycott have circulated recently, and protests against the company have escalated. In France, a Tesla dealership in Toulouse was set on fire, while demonstrations in New York City and Chicago led to arrests and viral images of police in riot gear guarding Tesla stores.

Even competitor brands are profiting from the turmoil. Kia released a witty sticker claiming, “I bought this after Elon Musk went crazy.” This refers to the famous bumper sticker: “I bought this before Elon Musk went crazy.”

Trump buys a Model S

Musk’s response to the backlash has done little to calm investors. Over the weekend, he suggested on X (formerly Twitter), which suffers from a hacking attack, that billionaire and philanthropist George Soros was behind the protests, further fueling controversy. Analysts say Musk’s public persona is now a liability for Tesla.

After Tesla’s stock slumped, President Donald Trump publicly supported Elon Musk. He had multiple Teslas brought directly to the White House, choosing a Model S for himself, and threatened harsh penalties for the vandalism against the showrooms, calling them “domestic terrorism.”

Although Trump previously showed little interest in electric vehicles, he praised Tesla’s affordability and features. It’s worth noting that the President doesn’t drive himself.

Lack of fresh product

Tesla executives appear to be hedging their bets. According to recent data, CFO Vaibhav Taneja offloaded $1.7 million (€1.5 million) in stock, while board chair Robyn Denholm sold shares worth $33 million (€ 30.2 million). Musk’s brother, Kimbal Musk, has been selling stock since February, raising questions about internal confidence in the company’s trajectory.

At the heart of Tesla’s troubles is its lack of fresh product innovation, with rivals closing in. Instead of launching new models, Tesla has leaned heavily on its long-promised Full Self-Driving software. However, the technology remains far from genuine autonomy, and regulators remain skeptical.

In response to the turmoil, Musk stated that he intends to double production in the US over the next two years. Self-driving cybercabs will play a crucial role in this plan.

Production will start in Texas next year. “We have so much confidence in autonomous driving that it won’t even have a steering wheel or pedals,” Musk replied. “Either it will be in autonomous mode, or there won’t be any driving at all.”