Tesla Inc. (TSLA) is facing a rough start to 2025, with its shares plunging nearly 25% year-to-date, making it the worst performer among the so-called Magnificent 7 tech stocks. On Tuesday, Tesla stock tumbled over 8% as fresh data revealed a massive drop in European electric vehicle (EV) registrations, adding to growing investor concerns.
Tesla’s Struggles in the European Market
According to the European Automobile Manufacturers’ Association, Tesla registered just 9,945 vehicles in Europe this January, a staggering 45% drop from the 18,161 units registered a year earlier. This sharp decline highlights the company’s growing challenges in maintaining its dominance in the competitive EV market, where legacy automakers and Chinese rivals like BYD continue to make aggressive moves.
Wall Street Worries: Is Musk Distracted?
Tesla’s stock slump isn’t just about weak European sales. Wall Street analysts have expressed concerns that CEO Elon Musk’s focus has drifted away from Tesla due to his involvement in external ventures, including his cost-cutting initiative at Dogecoin (DOGE). Investors worry that Musk’s public controversies and increasing political entanglements—especially his ties to former U.S. President Donald Trump—may be alienating some consumers in key markets like Europe and parts of the U.S.
Tariff Uncertainty and EV Incentive Cuts Weigh on Sentiment
Beyond leadership distractions, Tesla is also battling macroeconomic headwinds. The looming threat of new tariffs and the potential reduction of EV incentives could significantly impact demand for its vehicles. These factors have made 2025 a challenging year for Tesla, despite the stock rebounding nearly 20% since November 5, the day Trump won the U.S. presidential election.
With Tesla losing market share in Europe and investor sentiment shifting, all eyes are now on the company’s upcoming earnings report and Musk’s next strategic moves. Will Tesla turn the tide, or is the stock headed for more turbulence?
