It’s been a brutal year for Tesla. During this same period, its stock has been consistently volatile as well, with shares increasing or decreasing by a minimum of 5% on 14 separate trading days. On Wednesday, Tesla's shares fell about 6% following data from the European Automobile Manufacturers' Association (ACEA), which revealed a concerning 40% year-over-year drop in new vehicle registrations in Europe for February. Further, battery electric vehicle sales exploded with a 26% jump in sales over the same period. In stark juxtaposition, this dip underscores the myriad of hurdles that the industry is weathering.
Add European sales which have cratered — this is the final straw that breaks this company’s back. Even as chief executive Elon Musk conspires with the nascent second Trump administration, the brand’s reputation is falling further in the toilet. Some potential electric vehicle (EV) buyers have been alienated by Musk's political rhetoric and affiliations, contributing to the brand's tarnished reputation. William Blair analysts noted this as a result of "pushback from Musk's foray into politics."
Given these challenges, Tesla is looking ahead to its next big ambition — autonomous vehicles. Tesla CEO Elon Musk has made a number of ambitious claims, including a self-driving robotaxi service in Austin by June. The company’s committed robotaxi platform, called the Cybercab, has yet to go into production. At the same time, Alphabet’s Waymo continues to expand a commercial robotaxi service in Austin and other markets. This decision puts some significant competitive pressure on Tesla.
Tesla's autonomous driving system still requires a human driver ready to take control at any moment, which reflects the company's cautious approach amid regulatory and safety concerns. Tesla expected to fully ramp up production of its redesigned Model Y SUV next month. Earlier this year, the company introduced some partial shutdowns at various plants to speed up for vehicle’s manufacturing lines.
So far this year has been characterized by big ups and downs on the stock market for Tesla. Since Inauguration Day, the company’s shares are down about 36% — that includes a stunning 28% decline just in the month of February. These numbers highlight the dramatic cash crunch Tesla is experiencing as it stares down massive operational and reputational threats.