Is the Tesla joyride over? Investors are pumping the brakes after the electric car company suffered a serious decline in vehicle registrations in the normally EV-friendly European market last month.
Data from the European Automobile Manufacturers’ Association found that 9,945 Tesla cars were registered in January—a 45% drop from the 18,161 registered in Europe a year earlier
Meanwhile, Tesla’s new Model Y factory in Berlin has been sputtering, slowed by staffing shortages, production delays, and protesters who, in January, projected a picture of CEO Elon Musk on the factory facade.
Germans aren’t the only ones who aren’t fond of President Trump’s right-hand man at the moment. Over in merry old England, an ad by a group called Everyone Hates Elon is urging citizens to steer clear of his “Swasticar.” Even here in the US, anti-Musk protests have popped up outside congressional offices and Tesla dealerships across the country.
As for the business itself, Tesla sales slumped 1.1% annually in 2024, its first drop in a decade.
All of which begs the question: Is this high-flying stock running on fumes?
A tough road ahead
“I think we're looking at a challenging six to twelve months ahead, with stock volatility likely to continue,” predicted Andrew Lokenauth, founder of TheFinanceNewsletter.com. “The window for Tesla's market dominance might be closing faster than investors realize.”
Although Tesla is still up since Trump's election on November 5, shares slid 8% on Tuesday and another 3.97% today, plunging the company’s market value below $1 trillion for the first time since November. Although a recent report by Wedbush analyst Dan Ives stuck to its outperform rating, it notes that DOGE layoffs have turned off large swaths of consumers “in Europe and pockets of the U.S.”
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Taking a glass-half-full approach, Lokenauth pointed out that any ensuing stock dips “could create buying opportunities for long-term investors.” But that’s not a sure thing.
“The biggest mistake Tesla investors could make is assuming the stock will always rebound just because it has in the past,” warned Custom Fit Financial certified financial planner Chad Gammon. "Additionally, Elon Musk’s political stance could trigger significant consumer backlash, similar to what we recently saw with conservatives and Bud Light. If public perception shifts against Tesla, it could have lasting effects on sales and brand loyalty.”
Bottom line: Having all your eggs in the Tesla basket has been great for the last 12 months (shares are up 46%) and the last five years (shares are up over 550%), but the stock's performance has always been tied to its firebrand CEO. And with more questions than answers about Musk these days, shareholders may want to consider diversifying their portfolio for their own protection. —JD