(AFP) – Shares of the US electric vehicle pioneer Tesla slumped as much as nine percent Tuesday, as investors digested disappointing European sales and chief executive Elon Musk’s aggressive foray into politics. The auto giant sold less than 10,000 units in Europe last month, down around 45 percent from a year earlier. Tesla’s shares fell nine percent in early trading before paring some losses to trade down 8.1 percent at around 12:15 pm local time in Washington (1715 GMT).
The decline in the company’s share price dragged its market capitalization back below $1 trillion for the first time since November 2024. Musk has taken on a high-profile advisory role in US President Donald Trump’s administration, charged with slashing government spending. He has also voiced strong support for far-right political leaders in Europe — including in the recent German elections — sparking criticism from some European politicians.
“Tesla is clearly facing challenges in Europe and the Musk brand issues are adding to the headwinds,” Wedbush Securities analyst Dan Ives told AFP in a message, estimating that between 10 and 15 percent of these headwinds were down to anti-Musk behavior. Tesla’s share price surged in the wake of the 2024 US presidential election, with investors betting that Musk’s proximity to Trump could help his companies succeed. The poor sales figures in Europe appear to have punctured that optimism — at least for now — and raised concerns that what may be popular in the United States could in fact be detrimental to the company’s success elsewhere.
Musk’s political views in Europe and Germany are “not the best thing for Tesla sales,” Ives said, adding: “It’s like putting mustard on a slice of pizza.” Alongside its European struggles, Tesla also faces stiff competition from automakers like BYD in China — a key market for electric vehicles. Earlier this week, the company announced it would start offering advanced self-driving functions for its cars in China, shortly after BYD said it would introduce self-driving technology for nearly all its vehicles.
© 2024 AFP
