Tesla (TSLA, Financial) recently announced plans to acquire certain assets of the bankrupt German high-tech manufacturer Manz AG, including its Reutlingen plant and over 300 employees. However, this acquisition comes at a time when Tesla's European sales are facing significant challenges, particularly in Germany where sales dropped nearly 60% year-over-year in January. Overall, Tesla's European sales fell over 45% to just 9,900 units, despite a 37% growth in the new electric vehicle market on the continent, which now holds a 15% market share.
Moreover, Tesla's stock price suffered a blow, plummeting over 8% and losing $89.2 billion in market capitalization, pushing it below the $1 trillion mark. Year-to-date, Tesla's stock has decreased by 25%, contrasting sharply with Nasdaq's 1.5% decline in the same period.
Analysts point to several factors for this downturn, including CEO Elon Musk's political involvement in Europe and delays in car purchases as consumers anticipate the new Model Y in 2025. Additionally, Tesla's first-quarter sales in California, a key market, fell by 11.6% year-over-year.
Tesla is also under pressure from Chinese automakers offering competitive pricing on advanced driver-assistance features. Musk's political activities and recent tariff announcements by the Trump administration have exacerbated concerns about Tesla's global demand.
