Tesla’s share price took a sharp nosedive on Tuesday.
Plunging over 8% by early afternoon as reports surfaced of a staggering 45% decline in the company’s European sales.
This downturn, which comes despite growing demand for electric vehicles among Tesla’s competitors, caused a significant hit to Elon Musk’s net worth.
Slashing it by nearly $15 billion.
Plummeting Tesla sales
By 1:20 p.m. EST, Tesla’s stock was trading at $302.60, marking an 8.4% drop from its opening price.
The company’s market capitalization dipped to $972.98 billion, a level not seen since last November when Tesla’s valuation last closed below the $1 trillion mark.
Meanwhile, Musk’s personal fortune took a hit.
Dropping nearly 4% to $365.3 billion, a staggering $100 billion decline from its record peak of $464 billion in December 2024.
The broader technology sector also saw a downturn, though not as severe as Tesla’s losses.
The Nasdaq slipped 1%, hitting its lowest level in over a month.
Political controversy
Tesla’s sharp stock decline coincides with reports of faltering sales across Europe.
Where the company has struggled to maintain its foothold.
According to Bloomberg, January 2025 saw Tesla register its lowest number of new cars in Germany since July 2021 and in France since August 2022.
The drop comes amid growing scrutiny over Musk’s political involvement.
Both in the United States, where he serves as a key adviser to President Donald Trump, and in Europe, where his open support for far-right parties has raised eyebrows.
Analysts weigh in on Tesla’s struggles
Industry experts have pointed to Musk’s deepening role in politics as a key factor weighing on Tesla’s performance.
In a recent analysis, Wedbush Securities noted that Musk’s increasing influence within the Trump administration,
“With Musk dedicating even more time to DOGE than expected, investors fear he may be neglecting Tesla at a pivotal moment for the company,” the Wedbush report stated.
The firm also warned that Musk’s political entanglements could alienate potential customers.
Though it categorized the risk as a “containable brand issue” rather than an existential threat to Tesla.
Tumultuous road ahead
Musk’s expanding political influence has drawn sharp criticism, especially as Trump’s administration faces multiple legal challenges over recent policy decisions.
Reports indicate that Musk has imported controversial management tactics from his takeover of Twitter—now rebranded as X—into federal agencies.
Moves that have been met with resistance from government officials.
the company faces a critical test in the months ahead.
