Tesla Faces Sharp Stock Decline and Mounting Challenges

Tesla's stock has dropped significantly as European sales plummet, competition intensifies, and Elon Musk's controversial actions draw backlash.

Tesla's stock price fell 8.4% on Tuesday, closing at $302.80, marking a 25% decline in 2025 and a 38% drop from its December 2024 peak.
European Tesla sales fell 45% in January 2025 compared to the previous year, as competitors like Volkswagen and Renault gain market share and buyers await a refreshed Model Y.
Elon Musk's polarizing political involvement, including support for far-right parties in Europe and controversial public gestures, has led to consumer boycotts and reputational damage for Tesla.
Analysts predict Tesla's Q1 deliveries may fall below expectations, with estimates as low as 359,000 vehicles, potentially the weakest quarterly performance since 2022.
Tesla's temporary production shutdowns for Model Y updates and increasing competition in the EV market exacerbate concerns about the company's short-term performance.