Tesla's continuing sales slump in Europe weighs on stock price

Tesla's stock experienced a drop of over 4% on Thursday as new data revealed a persistent decline in sales across Europe. Despite the growing enthusiasm for electric vehicles (EVs) in the region, Tesla's EV registrations took a hit, falling approximately 23% year-over-year in August, as reported by the European Automobile Manufacturers' Association (ACEA). The figures showed only 14,831 Tesla EVs registered in Europe last month, a stark decrease from 19,136 registrations in August 2024. In the first eight months of this year, Tesla's registrations in Europe plummeted by 32.6%, according to ACEA data. In contrast, overall EV registrations in Europe surged by around 26% during the same period, highlighting a troubling trend for Tesla. Traditional petrol and diesel vehicle registrations also saw a significant decline, dipping over 20%. Despite the challenges, analysts at RBC expressed optimism in a recent note, predicting that Tesla could achieve total deliveries of 456,000 vehicles in the third quarter—surpassing the FactSet consensus of 448,000 and the Visible Alpha estimate of 440,000. They expect a surge in U.S. EV purchases as consumers hurry to take advantage of a $7,500 federal tax credit that is set to expire at the end of September. Although Thursday's stock dip is notable, Tesla has shown resilience following a rocky start to the year, with shares rising by 5% in 2025 after a staggering 36% decline in the first quarter. However, CEO Elon Musk's political engagements, including controversial endorsements and participation in a recent violent rally in the U.K., have reportedly impacted Tesla’s brand image and deterred some potential buyers. In response to increasing competition from firms like Volkswagen and BYD, Tesla has announced plans for a more affordable model aimed at rekindling consumer interest in the brand, as it navigates a shifting market landscape.