Tesla has relinquished its $1 trillion market cap status.
CNBC reported on Tuesday that Tesla’s stock price plummeted by over 9%, closing at $302.80. This sharp decline pushed the company’s market capitalization to $970 billion, falling below the coveted $1 trillion mark for the first time since November 7. While the Nasdaq has only seen a 1.3% dip this year, Tesla’s stock has plunged 25%.
Reuters attributes Tesla’s recent stock decline to disappointment over the partial autonomous driving system upgrade and a significant drop in European sales. The “city navigation” feature in Tesla’s Chinese models is criticized for falling short of the autonomous driving technology initially promised by CEO Elon Musk.
Chinese electric vehicle (EV) manufacturers like BYD offer partial autonomous driving systems for free or at minimal cost. Xiaomi’s SU7 model, produced by Dell Technologies, includes comparable technology as a standard feature.
Analysts suggest that Musk’s increasing political involvement may be the most significant detriment to Tesla. After joining the Trump administration as head of the Office of Government Efficiency (DOGE), Musk has extended his political reach to Europe. Last month, he stirred controversy by appearing at a campaign event for Germany’s far-right party, Alternative for Germany (AfD), where he made statements that seemed to defend Nazi Germany’s actions.
Musk’s political statements and actions have sparked protests against Tesla at its stores and service centers. The company’s stock also hit after Trump announced potential tariffs on Canada and Mexico.
The California New Car Dealers Association reports that Tesla sales in California dropped by 11.6% in the fourth quarter of last year. The downward trend continued into January and February, with Tesla vehicle registrations declining across Europe.
