What Happened?
Shares of electric vehicle pioneer Tesla (NASDAQ: TSLA) fell 4.4% in the morning session after reports showed the company's sales in the European Union plunged for the fifth consecutive month in May 2025.
According to the European Automobile Manufacturers’ Association, new car registrations for Tesla in the EU, a proxy for sales, fell by nearly 41% year-over-year in May.
This decline occurred even as the broader market for battery-electric vehicles in the bloc expanded by 25%. The drop in European sales adds to investor concerns about weakening global demand and increasing competition from rivals.
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What The Market Is Telling Us
Tesla’s shares are extremely volatile and have had 133 moves greater than 2.5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock gained 7.6% after the company launched its highly anticipated robotaxi service in Austin, Texas, impressing Wall Street. The initial rollout was limited in scale, targeting a select group of investors and social media influencers.
Despite its small scope, the launch reignited investor excitement about the company's potential to generate significant revenue from self-driving technology, signaling a shift in focus beyond its core electric vehicle business.
Wedbush analyst Dan Ives, who took two 15-minute rides, described the experience as "comfortable," "safe," and "personalized." Ives, who maintained a Buy rating on Tesla with a $500 price target, called the event "the beginning of Tesla's AI story.".
Tesla is down 14.4% since the beginning of the year, and at $325.16 per share, it is trading 32.2% below its 52-week high of $479.86 from December 2024. Investors who bought $1,000 worth of Tesla’s shares 5 years ago would now be looking at an investment worth $4,941.
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