Polarizing tech billionaire and CEO of Tesla and SpaceX, Elon Musk, must be feeling a bit deflated after some disappointing news about the value of his electric vehicle company. The situation arises as sales figures show a decline in Tesla EV sales in China, previously one of Tesla’s strongholds, and in Europe, and stocks are also being sold off.
Despite the news, Musk’s status as the world’s richest man is not under threat. His attention is currently directed at the United States Department of Government Efficiency (DOGE), which he is the unofficial head of while he serves as President Donald Trump’s advisor.
Disappointing news for Tesla as sales drop in China and Europe
Tesla is seeing a spate of sell-offs of its stocks that has seen the EV maker’s shares drop by a significant percentage. The figures since December 2024 show a drop that’s started a trend among investors who are deciding to grow their funds elsewhere.
In just 25 days — from January 31 to February 25, 2025 — Tesla shares plummeted by 25%, shedding $330 billion in market value and falling to $970 billion. This means that the auto giant’s title as a trillion-dollar company is no more, a fact that’s no doubt caused some disheartenment among Tesla execs.
On February 26, 2025, the stock dropped another 8%, closing the day at $302.80. New data revealed that new Tesla vehicle registrations slumped in Europe by 45% year-on-year for January. This is a direct indication of Tesla’s failing progress, as overall sales of BEVs on the continent climbed. Sales in China, historically a Tesla stronghold, are also decreasing and it’s not clear whether Tesla is working on a strategy to recover.
Do Tesla’s dropping sales have anything to do with Musk’s friendship with Trump?
Speculation suggests that Tesla’s loss of its trillion-dollar status may have a lot to do with European consumers’ feelings about Musk’s relationship with Trump and his active role in the current administration, which is driving shifts in European relations that have been stable for years.
It’s not all doom and gloom, though. The stock sell-offs may simply be down to Tesla shareholders locking in on their gains in the previous year, as despite the drop-off in recent months, the company’s stock is actually up 52% over the past 12 months. Even a recent recall of thousands of units hasn’t done much damage.
There may still be further drops in shares in the near future, according to one investment expert. He says Tesla shares could fall further after a revision in recent Tesla corporate management policy about deliveries in 2025.
Elon Musk is still worth investing in, according to investors
Elon Musk’s responsibilities are vast and his time must be stretched, considering his multiple leadership roles at SpaceX, social media platform X, xAI, which is an artificial intelligence outfit, and Neuralink, a company developing brain-chip implants. His recent controversial foray into politics via his association with Donald Trump and DOGE is another endeavor taking Musk’s attention.
Despite this, loyal Musk customers and investors appear confident in Musk’s unique capacity to juggle all his company functions, and it’s expected this will continue with his political ones.
Tesla won’t be in a slump for long, investors believe
One expert offered his take on Tesla’s medium-term performance on X:
“Tesla’s superior products, new more affordable vehicle, which I believe will be a new form factor and expand Tesla’s total addressable market, and the promise of unsupervised autonomy will sell more Teslas.”
Many investors feel that Tesla’s downturn won’t last long. There are plans to launch a robo-taxi service in 2025 and Tesla has new models scheduled for production that are aimed at meeting driver preferences. Fully self-driving technology is set for deployment in China, clearly demonstrating that the EV manufacturer’s operations and innovations are not slowing down in the least.
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