Tesla shares traded roughly 3.3% lower as of midday, reflecting ongoing investor concerns about the company’s weakening sales in Europe, persistent global demand challenges, and skepticism about near-term catalysts despite upcoming technology demonstrations.
European Sales Continue to Slide
A primary driver of today’s decline is Tesla’s ongoing sales slump in Europe. Recent data show that Tesla’s new vehicle registrations in key European markets have dropped sharply, with April sales in Spain down 36% year-over-year and broader European deliveries declining 37% in the first quarter compared to the previous year.
Notably, while Tesla’s sales are falling, the overall European EV market-including hybrids-has surged by over 50% in the same period.
This suggests that Tesla’s challenges are not simply a reflection of weak EV demand, but rather company-specific issues such as increased competition, limited new model appeal, and potential brand headwinds.
Global Deliveries Miss Expectations
Tesla’s global deliveries for the first quarter came in at 336,681 vehicles, the lowest level in over two years and well below analyst expectations.
The company attributed some of the shortfall to the Model Y production changeover, but even with production lines now back to normal, sales have not rebounded as hoped. Inventory levels have also risen, further highlighting the disconnect between production and demand.
Analyst Sentiment and Valuation Concerns
Adding to the pressure, analysts at Jefferies reiterated a “hold” rating on Tesla, acknowledging the company’s renewed focus on technology-particularly the upcoming June Robotaxi demonstration in Austin-but cautioning that Tesla’s competitive edge may now hinge more on scalability than on technological leadership.
The stock’s lofty valuation, trading at 135 times forward earnings, amplifies the risk of any disappointment in near-term execution or future growth prospects.
Big Expectations for Robotaxi, But Risks Remain
With core EV sales struggling, much of the market’s hope is pinned on Tesla’s June Robotaxi demonstration, which is expected to showcase the company’s unsupervised Full Self-Driving technology.
While a successful event could reignite excitement and support the stock, there is considerable uncertainty about the timeline and scalability of autonomous vehicle services.
If the demonstration falls short of expectations, or if regulatory and technical hurdles persist, investor sentiment could deteriorate further.
Brand and Leadership Questions
Some investors attribute Tesla’s recent struggles in part to CEO Elon Musk’s high-profile political involvement, which may have impacted the brand’s perception in key markets. Regardless of the cause, the data make clear that Tesla’s sales momentum has not yet turned the corner.
Just wait till we see second quarter earnings…..I predict a 30-40% fall in price. It is not yet appreciated exactly how much Musk is HATED. traffic to showrooms is a disaster!