Tesla’s stock has experienced significant declines following troubling sales data emerging from Europe and China. Global demand for Tesla vehicles has diminished substantially after Elon Musk assumed a prominent role in the Department of Government Efficiency (DOGE), a government entity focused on minimizing federal expenditures. Musk’s public persona has divided opinions; some laud him as an innovative entrepreneur who has propelled electric vehicles into the mainstream, while others criticize him for missed deadlines on new car launches and erratic behavior.
Critics of Musk appear to hold sway this year, as Tesla’s reduced sales have severely impacted its stock value. However, long-term investors may find encouragement in the remarks made by a Tesla stock analyst, especially in light of a 23% increase in shares observed on April 9.
Tesla’s achievements have largely stemmed from Elon Musk’s strategic choice to develop high-performance electric vehicles instead of focusing solely on fuel efficiency. This strategy, aimed at rivaling brands like Mercedes, BMW, and Porsche, resulted in their vehicles becoming aspirational choices for affluent and performance-focused consumers, catching traditional automakers like Ford and General Motors by surprise. Despite this success, many automotive manufacturers now offer electric vehicles with comparable performance, narrowing the competitive advantage Tesla once held. Additionally, Musk’s recent fall in popularity among key consumers has not helped maintain its global market share.
Sales in China have been notably affected, with the China Passenger Car Association reporting a 49% decrease in Tesla’s sales year-over-year in February. Only 30,688 new energy vehicles were sold by Tesla during that period, marking a two-year low. In comparison, Chinese rival BYD sold 318,233 vehicles at the same time. Europe’s market also saw a downturn, as evident in France, where according to the French industry association Plateforme Automobile, Tesla vehicle registrations dropped by 37% in March. This decrease is significant considering the overall EV registration in France only fell by 15%, with France being Tesla’s second-largest European market.
In Germany, the Federal Motor Transport Authority reported a 76% drop in Tesla sales in February, amounting to 1,429 units, despite a 31% overall rise in EV registrations. In the U.S., Tesla has also faced diminishing demand, with a 1% decline in sales in 2024, marking the first annual drop in over a decade. Moreover, in the fourth quarter, Tesla’s unit sales increased by just 2.3%, even as total EV sales grew by 15%, according to the Cox/KBB quarterly EV sales report. By contrast, Ford’s EV sales have increased by 16%, and General Motors saw significant growth exceeding 100% across its Cadillac, GMC, and Chevrolet brands.
During the first quarter, Tesla reported its worst delivery performance since 2022, with only 336,000 vehicles delivered, a stark contrast to Wall Street’s expectations of 377,000 vehicles. Despite these setbacks, some analysts remain optimistic about Tesla’s future. Benchmark analyst Mickey Legg noted that while sales declines present challenges, potential developments could renew interest in Tesla’s shares. Legg highlighted the prospect of Tesla unveiling a new model in the second quarter and expressed “cautious optimism” about the introduction of Tesla-operated robotaxis as a paid service in Austin, Texas, slated for June. There is also speculation about community feedback potentially impacting additional launches in other cities, and discussions regarding the demand for Tesla’s Optimus robots, which could open doors in the industrial automation market.
Even though this optimism doesn’t necessarily equate to an increased stock price target—Benchmark has reduced its target from $475 to $350—there is an optimistic outlook particularly following promising news regarding ongoing trade negotiations. Tesla’s stock, which has lost roughly a third of its value in 2025, rebounded as investors reacted to news of President Trump’s decision to delay planned reciprocal tariffs for 90 days for key countries, including the European Union. This potential easing of trade tensions has shifted the focus back to Tesla’s anticipated initiatives, contributing to a boost in shares. The continuation of these gains will likely depend on Musk’s next moves and the success of trade negotiations over the coming months.
