The shares have now cumulatively fallen 16 per cent in four straight trading sessions of losses
A QUICK unwind in the shares of Tesla pushed the electric vehicle (EV) maker’s market capitalisation below the coveted US$1 trillion mark on Tuesday (Feb 25), amid reports of a stark slowdown in car sales in Europe.
The Elon Musk-led company’s stock closed down 8.4 per cent at US$302.80, at a market cap of US$974 billion. The shares have now cumulatively fallen 16 per cent in four straight trading sessions of losses, wiping out US$186 billion in market value over that time.
Sales of Tesla’s vehicles sank 45 per cent last month across Europe, even as EV sales soared 37 per cent for the overall industry, according to the European Automobile Manufacturers’ Association. It highlights the growing risk to the company’s core car-selling business from its chief executive officer’s political forays.
“Tesla’s European dreams are stalling out with January sales plummeting,” said Steve Man, senior analyst with Bloomberg Intelligence. At the same time, “the EV giant is facing competition and controversies tied to Elon Musk”.
The tables have turned quickly on Tesla. The stock soared late last year after Donald Trump won the US presidential election, with investors betting that Musk’s close friendship with the president and his team will pave the way for an easier regulatory path for the company’s ambitions to develop a fully self-driving car.
However, after touching an all-time high in mid-December, Tesla’s stock has been on a steady downward slide, with worries about slowing sales and Musk’s preoccupation with politics overshadowing the initial exuberance.
Tesla shares are now by far the biggest decliner among the mega-cap technology stocks, weighing heavily on the group’s overall performance. Earlier on Tuesday, the Bloomberg Magnificent 7 index plunged into correction territory, erasing about US$1.4 trillion in value. BLOOMBERG
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