Tesla’s market value has dipped below the $1 trillion mark for the first time since November 2024, after fresh data showed its sales in Europe and the UK fell by almost 50 per cent in January.
The decline stands in stark contrast to a 34 per cent rise in European electric car registrations overall, according to industry group Acea.
Analysts say the slump highlights intensifying competition in the European EV sector, notably from Chinese manufacturer BYD, which bundles certain vehicle features as standard rather than as add-ons. AJ Bell investment director Russ Mould adds that some customers may also be making a “principled stand” against Tesla’s chief, Elon Musk, following his controversial political engagements in both the US and Europe.
Mould points to mounting rivalry—particularly BYD and other Chinese firms—as a key driver behind Tesla’s weaker performance. The impact of Musk’s political statements is also coming under scrutiny, with critics citing his public support for jailed far-right activist Stephen Yaxley-Lennon in the UK (known as Tommy Robinson), praise for Germany’s far-right AfD party, and purported attempts in the US to reduce public funding. Furthermore, Musk’s prior closeness to President Donald Trump—who has repeatedly criticised electric vehicles—has drawn questions about Tesla’s long-term benefits from a Trump administration.
This downturn follows Tesla’s first annual sales decline in over a decade last year, when the EV pioneer faced a slowdown in demand. While it had received a share-price boost post-election on hopes that Musk’s ties to Trump would bolster the brand, analysts now see little upside from that relationship, particularly as Trump pledges to reverse initiatives that encourage the adoption of electric cars. Meanwhile, interest rate uncertainties and potential new tariffs under Trump are adding to market jitters around Tesla’s outlook.
