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Tesla (TSLA) shares are under pressure after European sales hit a two-year low sending the electric vehicle (EV) pioneer's market capitalization below the $1 trillion mark. The stock's decline is one of the leading laggards dragging the "Magnificent Seven" into correction territory.
The drop in European sales comes amid increased competition from Chinese EV makers like BYD (1211.HK, BYDDY) and as CEO Elon Musk dives into his divisive political career as the head of US President Donald Trump's Department of Government Efficiency (DOGE).
Watch the video above to hear Catalysts hosts Seana Smith and Madison Mills report more on this.
To watch more expert insights and analysis on the latest market action, check out more Catalysts here.
This post was written by Naomi Buchanan.
Let's take a look at Tesla. Tesla's market cap falling just below the $1 trillion dollar mark. Shares do face some pressure, which comes as its European sales hit a two-year low. You're looking at today's drop of just about 7%. So talk about the significance of this. We certainly have seen this risk-off sentiment. Many of these MAG 7 companies have been caught up in some of that selling pressure here. You're looking at Tesla here lead to the downside. It's actually the biggest laggard in the index during the drawdown that we have seen from the December high level. So again, we have seen this continuation of selling here right now, falling below that $1 trillion dollar market cap. Lots of questions about what it's going to take in order to reverse some of that momentum, obviously beyond just Tesla, beyond into some of those larger tech giants and some of the more broader selling that we have been seeing, but again, Tesla under a bit of pressure, of course, putting into context after the massive run-up that we saw following the election.
Yeah, that's that's a really great point, though, Tesla being the loss leader today does officially put the Magnificent 7 into correction territory as of this morning, and a reminder correction territory is when a stock or an ETF and index is down by 10%. So that's what's happening with the MAG 7 ETF right now, but the big question I think is how much of this is due to Elon Musk's politics impacting his sales in Europe. I think it's interesting context they had a 1% market share in Europe in January. That was down from just 1.8% this month last year, so not that huge of a drop off, but when you compare it to some competitors, especially the Chinese EV giants, they had a lot of success in January. So it points to this kind of comparison game, and whether or not the competitors are able to take up more market share given Musk's continued focus on some far-right politicians in Europe, and maybe that is starting to weigh on those sales. Again, BYD in particular, outselling Tesla in the UK for the first time ever for the month of January here.
