Tesla's Plummeting Sales Send Shares into Tailspin amid Global Market Challenges

Recent market turmoil has seen Tesla shares plunge significantly, as global sales figures for the company depict a worrying downward trend. The electric vehicle giant faced a 15.43% fall on March 10th, extending a three-day decline to 20.40%, marking the steepest drop since October 2024. This downturn coincides with broader market struggles, impacting major tech stocks alike.

Tesla's troubles are largely attributed to weak sales in critical regions. In China, one of its most vital markets, Tesla reported February wholesale figures of 30,688 units sold, a significant 49% decline compared to the previous year. This represents the first time Tesla's monthly sales have fallen below 31,000 units since their introduction to the Chinese market, excluding April 2022.

European markets echoed this sentiment with alarming figures. Germany saw a staggering 76% drop in Tesla sales for February, with only 1,429 cars sold. Likewise, Sweden, Norway, and Denmark recorded declines of 42%, 48%, and 48%, respectively. Analysts suggest these reductions may link to CEO Elon Musk's controversial political stances in the United States, which some speculate have negatively impacted Tesla's brand appeal in Europe.

Furthermore, competition from domestic rivals and Chinese manufacturers, such as BYD, which recently surpassed Tesla in European market sales, compounds the company's challenges. Market analysts have expressed concerns about Tesla's trajectory, with UBS and Bank of America adjusting their delivery forecasts and price targets in light of shrinking numbers and delayed low-cost models.

Despite these hurdles, Tesla leadership remains optimistic about future growth, pledging to restore sales momentum by 2025. However, the current environment presents both valuation risks and brand challenges. With the stock closing at $222.15, Tesla's market cap has shrunk over $800 billion from its peak, underscoring the severity of its predicament. Observers warn that absent an uptick in sales or a mitigation of political risks, Tesla could face more intense valuation pressure.