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Tesla faces plunging stock prices amid broader tech market decline
Tesla, the electric vehicle manufacturer, is facing significant turbulence in the financial markets. Its stock plummeted over 15% on the New York Stock Exchange, wiping out approximately $130 billion in market capitalization in a single session. This sharp decline marks a critical turning point for Elon Musk's company, whose valuation has halved since December, now standing at roughly $700 billion.
Broader tech market downturn
This sharp decline is not isolated to Tesla; it reflects a wider trend of declining tech stocks on Wall Street. The Nasdaq index, heavily weighted towards technology, recorded a 4% drop, impacting major players such as Meta (-4.42%), Microsoft (-3.34%), Alphabet (-4.41%), Apple (-4.85%), Amazon (-2.36%), and Nvidia (-5.07%). These movements signal investor concerns over a potential economic slowdown in the United States.
Declining sales in key markets
Tesla is also grappling with a significant decrease in sales across several crucial markets. In China, the figures are alarming: only 30,688 vehicles were sold in February, marking a 49% decline compared to the previous year. This decline occurs against the backdrop of a booming Chinese market for "new energy vehicles," which includes electric and hybrid cars, that has seen an 82% increase overall. In Europe, the situation mirrors this downturn; despite a 34% rise in overall electric vehicle registrations, Tesla's sales have halved. In France, the brand has recorded a 26% drop in sales, while the UK stands out with a 21% increase.
Image tarnished by Musk's controversial choices
Beyond commercial performance and stock trends, Tesla's public image has also suffered due to Elon Musk's controversial stances. His association with Donald Trump and political engagements have sparked mixed reactions among consumers. Calls for boycotts of the brand are multiplying, particularly in Europe, where some owners express discomfort with Musk's outspoken opinions.
What lies ahead for Tesla?
Despite these challenges, Tesla maintains its position as the global leader in electric vehicles, thanks to its technologically advanced models and competitive pricing. The company is banking on a product refresh, including the anticipated launch of more affordable models and its robotaxi in 2025. However, competition is intensifying, with numerous new entrants emerging in the electric vehicle sector. Tesla's ability to rebound will hinge on its capacity to meet market expectations and revive its image among consumers.
