Tesla’s stock (TSLA) has taken a significant hit, closing at $298.23, marking a 9.77% decline from the previous trading session. The drop comes as the company faces declining sales in Europe, increasing competition, and shifting market capitalizations among major corporations.
Tesla’s European Sales Plummet
One of the key factors contributing to Tesla’s recent stock decline is the sharp drop in its European electric vehicle (EV) sales.
- In January 2025, Tesla registered only 9,945 vehicles in Europe, a 45% year-over-year decline.
- This is a concerning trend, especially considering that the overall European EV market grew by 37% in the same period.
- The decline is attributed to increased competition from local automakers, economic headwinds, and Tesla’s reduced incentives on vehicle purchases.
Market Capitalization Shift: Tesla Falls Below Berkshire Hathaway
Tesla’s market capitalization has dropped to $1.04 trillion, causing it to slip below Berkshire Hathaway, which now holds a valuation of $1.07 trillion. This shift highlights investor concerns over Tesla’s ability to maintain its market dominance amid rising competition and fluctuating demand.
Wall Street’s Take on Tesla’s Future
Despite the recent downturn, some analysts remain optimistic:
- Wedbush Securities' Dan Ives continues to maintain an outperform rating on Tesla, setting a $550 price target.
- He points to Tesla’s upcoming vehicle launches and advancements in autonomous driving as potential catalysts for future growth.
Looking Ahead: What’s Next for Tesla?
Investors are keeping a close watch on Tesla’s response to these challenges, particularly in:
- Revamping its European sales strategy to counter competition.
- Advancing its AI and self-driving technology to maintain its industry leadership.
- Managing CEO Elon Musk’s distractions, as his involvement in multiple ventures and political debates continues to be a point of concern among shareholders.
With mounting pressure from global EV rivals and fluctuating investor sentiment, the coming months will be crucial for Tesla’s market trajectory.