Tesla Shares Decline as Sales Struggle in Europe

Shares of electric vehicle maker Tesla (NASDAQ: TSLA) fell approximately 3.3% by 12:21 p.m. ET today. The company’s stock continues to face challenges as European sales weaken, despite an analyst’s recommendation for investors to hold.

Ongoing Sales Challenges in Europe

This year, Tesla’s stock has faced significant pressure, largely due to declining global sales. In the first quarter, the company reported about 337,000 deliveries, marking its lowest total in over two years. Some investors attribute these sales issues to CEO Elon Musk’s controversial political involvement, which they believe has impacted the brand’s reputation.

Recent data from the Spanish Association of Automobile and Truck Manufacturers revealed a 36% year-over-year decline in new Tesla sales for April, according to Reuters. Overall, Tesla’s sales decreased by 17% in the first four months of the year, while electric vehicle sales, including hybrids, surged by 54%. This trend highlights a broader issue for Tesla throughout the year.

Analysts Weigh In on Future Outlook

In related news, analysts at Jefferies reaffirmed their hold rating on Tesla, indicating that “TSLA is now regaining some tech initiative with June’s Robotaxi launch in Austin, but its advantage may hinge on scalability rather than technology as autonomous vehicle (AV) programs advance elsewhere.”

Image source: Getty Images.

Anticipation for the June Robotaxi Demonstration

With sales still experiencing difficulties, much depends on Tesla’s planned Robotaxi demonstration in June, which will showcase the company’s unsupervised full self-driving technology (FSD). Currently, Tesla’s forward earnings sit at 135, heavily influenced by upcoming company initiatives.

The success of the June demonstration could potentially revive interest in the stock, although it may not meet expectations. Given the high valuation and the struggling core EV business, I remain cautious for now.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Jefferies Financial Group and Tesla. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.