Shares of the US electric vehicle pioneer Tesla plunged Tuesday, leaving its market value below $1 trillion as investors digested disappointing European sales and chief executive Elon Musk鈥檚 aggressive foray into politics.
The auto giant sold less than 10,000 units in Europe last month, down around 45 per cent from a year earlier.
Tesla鈥檚 shares fell finished down 8.4 per cent to $302.80, a drop that sliced $89 billion from its market value in a bruising session.
Musk has taken on a high-profile advisory role in US President Donald Trump鈥檚 administration, charged with slashing government spending.
He has also voiced strong support for far-right political leaders in Europe 鈥� including in the recent German elections 鈥� sparking criticism from some European politicians.
鈥楾esla is clearly facing challenges in Europe and the Musk brand issues are adding to the headwinds,鈥� Wedbush Securities analyst Dan Ives told AFP in a message, estimating that between 10 and 15 per cent of these headwinds were down to anti-Musk behavior.
Tesla鈥檚 share price surged in the wake of the 2024 US presidential election, with investors betting that Musk鈥檚 proximity to Trump could help his companies succeed.
The poor sales figures in Europe appear to have punctured that optimism 鈥� at least for now 鈥� and raised concerns that what may be popular in the United States could in fact be detrimental to the company鈥檚 success elsewhere.
Musk鈥檚 political views in Europe and Germany are 鈥榥ot the best thing for Tesla sales,鈥� Ives said, adding: 鈥業t鈥檚 like putting mustard on a slice of pizza.鈥�
Alongside its European struggles, Tesla also faces stiff competition from automakers like BYD in China 鈥� 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.
