Tesla's market worth fell below one trillion dollars for the first time since November as a result of an 8 per cent drop in the EV makers' shares on Tuesday. This came after data indicated that the company's sales in Europe plummeted in January. Tesla sales fell by 45 per cent in Europe in January, in contrast to a 37 per cent increase in overall EV sales in the region.

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This is according to the European automobile manufacturers association. The sales slump highlights Tesla's problems after a drop in worldwide deliveries last year. This has put pressure on CEO Elon Musk to provide cheaper models and the autonomous cars he claims are the company's future.

While Tesla's market fell to about 980 billion dollars, the EV maker's value is twice the combined net worth of GM, Ford, Volkswagen, Toyota, Hyundai, and BMW put together. Investors are concerned that Musk's involvement in leading a radical cut to government debt is taking his focus away from tesla.

Tesla stock down over 24% in 2025

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Then there is Musk's DOGE versus government agencies and workers, which many suspect is hurting Tesla's reputation with certain customers. Still, despite the 24 per cent fall in 2025 so far, Tesla's stock is up over 50 per cent over the past year, with much of the surge coming after Trump's election win.

Separately, Tesla and other AI-related stocks, like Microsoft and Meta, are feeling the pinch of possible over-investment in AI. Deepseek's disruption to the global tech stocks on ai investment is already showing up in mega US firms' market valuations. The comparison between Deepseek’s mere 6 million dollars in ai development to the well over 2 trillion dollars of US firms is stark. Nvidia's earnings report later on Wednesday will give more clues on the ai hype versus returns narrative currently playing out.

(With inputs from the agencies)