Tesla shares plummeted over 5% on Monday after US President Donald Trump announced extensive tariffs on goods from Canada, Mexico, and China. The drop was steeper than its megacap peers, with Apple’s stock suffering the next-biggest decline.
The tariffs, which include a 10% levy on Chinese imports where Tesla produces about half its automobiles, are expected to hit Tesla’s profitability. In a recent earnings call, Chief Financial Officer Vaibhav Taneja warned that the new administration’s plans could impact the company’s business and profits.
Tesla’s decline in European sales is also affecting the stock. Registrations in France fell 63% in January compared to the same period last year, while sales in Sweden and Norway dropped by 44% and 38%, respectively. This decline was more pronounced than overall automotive sales and electric car registrations in these countries.
To combat declining demand for its Cybertruck, Tesla reduced lease prices for base Model 3 sedans and unpainted steel vehicles. However, this move may not be enough to boost sales, according to independent researcher Troy Teslike, who predicts only around 21,000 units of Cybertruck will be sold in 2025.
Tesla CEO Elon Musk’s ties to Trump have also contributed to a decline in the company’s brand value and reputation. Brand Finance reported a 26% drop in Tesla’s brand value last year, which may further impact investor confidence.
Source: https://www.cnbc.com/2025/02/03/tesla-shares-fall-5percent-on-tariffs-drop-in-europe-vehicle-registrations.html