The US president has initiated peace talks between Ukraine and Russia without the participation of European leaders, stirring geopolitical discussions. Meanwhile, Tesla, led by CEO Elon Musk, is experiencing a downturn in its European sales amid Musk's political involvement. Tesla's stock has emerged as the biggest faller among the Magnificent Seven stocks, recording a 22% decline in 2025. This shift comes as the company faces increasing competition in the electric vehicle (EV) market and growing concerns regarding its political engagements.
Tesla's electric vehicle sales in Europe took a significant hit in January, with sales figures indicating a 45% drop compared to the same period last year. The company's market share in Europe fell from 1.8% to 1%. Despite the overall European EV market witnessing a 37% increase in sales, Tesla's performance has notably lagged behind. In Germany, one of Tesla's key markets, car sales plummeted by 41% in 2024. Similarly, France saw Tesla registrations drop by 63% to just 1,141 cars in January, marking the lowest since August 2022.
Elon Musk's political interventions have been under scrutiny, particularly his congratulatory message to Alice Weidel, co-leader of a German political party, following the party's performance in the German elections. This involvement may have influenced European consumer sentiment, potentially contributing to the decline in Tesla's sales.
Furthermore, Tesla's competitiveness in the full self-driving (FSD) market is being challenged by BYD, China's largest electric car brand. BYD has partnered with DeepSeek to enhance its autonomous technology capabilities. DeepSeek's R1 AI model is recognized as a significant advancement in the ongoing US-China tech race, offering performance on par with leading US models at reduced costs. This development poses a challenge to Tesla's positioning within the autonomous vehicle market.
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