In brief
Electric car maker Tesla faces fierce competition and political controversies as it struggles to maintain its market position.
Tesla has hit a rough patch, with shares dropping over 9% to dip below a $1 trillion valuation for the first time since November 2024. The company's sales in January fell steeply—down almost 50% in the EU and UK—contrasting starkly with a more than 33% growth in overall European electric car sales, reported trade body Acea. Analysts attribute this downturn to increased competition from rivals, particularly Chinese manufacturer BYD, which offers features included in the base price that others charge extra for. In addition, Tesla's owner, Elon Musk, has stirred political controversy in both the US and Europe, which some analysts believe might contribute to the dwindling sales. Musk has been vocal in political circles, from reducing development funds in the US to supporting contentious figures like British far-right activist Stephen Yaxley-Lennon. His close ties to Donald Trump, who has made anti-electric vehicle comments, are also coming under scrutiny. Investors are left pondering the implications of Musk's actions on Tesla's future as growing market concerns and interest rate fluctuations only add to the jitters surrounding the carmaker's prospects.
