Tesla has faced a massive financial setback, with over $100 billion wiped off its value following a dramatic drop in vehicle sales in Europe. Last month, the electric car maker sold just 9,945 vehicles in the region, marking a 45% decline compared to January of the previous year, according to the European Automobile Manufacturers Association. This slump in sales starkly contrasts with the overall 37% growth in electric car sales across Europe.

The drop in demand has raised speculation that the company’s issues may be linked to Elon Musk’s increasing political activities. While Tesla’s decline in sales appears to reflect broader market challenges, including fierce competition from Chinese carmakers like BYD, some observers believe Musk’s high-profile political engagements could be a contributing factor.

Notably, Tesla’s sales in the UK were surpassed by BYD for the first time, and demand for Musk’s vehicles plummeted by 63% in France. In Germany, sales hit their lowest point since July 2021. The results sent Tesla shares tumbling almost 10%, pushing the company’s market capitalization back below the $1 trillion mark, a significant drop from its recent peak.

This dip in Tesla’s performance follows a broader trend, with the company facing pressure from rapidly growing Chinese competitors and falling sales in major markets. Last year, Tesla sold 1.79 million vehicles, a decrease from 1.81 million in 2023, marking the company’s first global sales decline in a decade.

One of the key factors contributing to Tesla’s woes may be consumers’ hesitation as they await the upcoming release of the Y model. However, analysts argue that Musk’s growing political involvement may be playing a role in the company’s current struggles, particularly in Europe.

Musk has been vocal on platforms like X, publicly supporting controversial figures and calling for the imprisonment of UK Prime Minister Keir Starmer, as well as endorsing right-wing political figures in Germany. His actions have sparked concerns that his political stances could alienate customers in key markets, especially in Europe, where political views can significantly impact consumer behavior.

Musk’s expanding influence across various sectors, from his leadership of SpaceX to his role in US politics, has also raised questions about whether he is spreading himself too thin. With his involvement in running Tesla, managing his space exploration company, and taking on a new role with the Trump administration’s Department of Government Efficiency, some investors are growing concerned about his ability to steer Tesla through these turbulent times.

As the electric vehicle market continues to evolve and competition intensifies, Tesla’s future remains uncertain. With the company’s stock value down and sales dipping in Europe, it remains to be seen how Musk’s political and business endeavors will affect the long-term trajectory of his electric vehicle empire.

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