Published by Global Banking & Finance Review®
Posted on February 25, 2025
2 min readLast updated: January 25, 2026
Add as preferred source on GoogleTesla's market value fell below $1 trillion due to a 45% drop in European sales, raising concerns about Elon Musk's focus and future plans.
By Noel Randewich
(Reuters) - Tesla's stock tumbled 8% on Tuesday, pushing its market value below $1 trillion for the first time since November after data showed the electric car maker's sales slumped in Europe in January.
The European Automobile Manufacturers Association reported that Tesla sales dropped 45% in Europe, compared with a 37% jump in overall sales of EVs in Europe.
The sales decline underscores Tesla's challenges following a dip in global deliveries last year that has raised pressure on CEO Elon Musk to roll out lower-priced models as well as the autonomous cars that he says underpin Tesla's future.
Tesla shares dropped to $305, leaving the company with a market capitalization of $981 billion, still over twice the combined value of General Motors, Ford Motor, Volkswagen, Toyota Motor, Hyundai Motor and BMW.
Some investors are also worried that Musk's role overseeing a radical downsizing of the federal government, at the behest of U.S. President Donald Trump, is potentially distracting his attention from Tesla as well as damaging the company's brand appeal to some consumers. Musk also heads privately held space rocket maker SpaceX and other private companies.
"He's a very hands-on operator, and if you're spending that much time in an office in the White House, how much time are you spending running all of your other companies, including the one that's publicly traded?" said Art Hogan, chief market strategist at B. Riley Wealth in Boston.
Concerns about potential over-investment in artificial intelligence are also weighing on Tesla, as well as Microsoft and Meta Platforms ahead of AI chip heavyweight Nvidia's quarterly report on Wednesday, Hogan said.
Tesla's stock recently traded at 112 times expected earnings, above its five-year average PE of 93, according to LSEG. By comparison, Ford's stock is valued at eight times earnings, and GM's is at seven.
Tesla bulls point to the company's plan to launch a new, cheaper electric vehicle and to Musk's promises to launch a paid autonomous car service.
With Tuesday's drop, Tesla shares remain up 51% over the past 12 months. Year-to-date, the stock is down 24%.
(Reporting by Noel Randewich; Editing by Leslie Adler)
Tesla's stock tumbled 8% after a report showed a 45% decline in sales in Europe, leading to its market value falling below $1 trillion for the first time since November.
Tesla's sales in Europe dropped 45%, while overall EV sales in the region increased by 37%, highlighting Tesla's challenges in the market.
Investors are worried that Musk's involvement in downsizing the federal government may distract him from effectively managing Tesla and its other companies.
Tesla's stock is valued at 112 times expected earnings, significantly higher than Ford's eight times and GM's seven times earnings.
Tesla plans to launch a new, cheaper electric vehicle and has promised to introduce a paid autonomous car service to boost sales.
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