TLDR:
- CFRA analyst remains bullish on Tesla despite weak China numbers, citing autonomous driving potential and $5 trillion market opportunity
- Tesla faces product lineup stagnation with 95% of sales from Model 3 and Y, while competitors gain market share in Europe
- Weekend protests “Tesla Takedown” occurred across multiple locations, with demonstrators opposing Musk’s role in Trump administration
- Recent polls show declining popularity for Musk, with 53% opposing his government role and only 35% positive rating from EV drivers
- Tesla’s European sales dropped sharply in January 2025 – Germany (-60%), France (-63%), Norway (-38%), UK (-12%)
Tesla, Inc. (NASDAQ:TSLA) is experiencing mounting challenges in early 2025, facing a combination of declining European sales, widespread protests, and shifting consumer sentiment tied to CEO Elon Musk’s role in the Trump administration.
Recent data shows Tesla’s European market performance has weakened substantially. January 2025 registration numbers reveal steep declines across key markets, with France seeing a 63% drop, Germany experiencing a 60% decrease, Norway falling 38%, and the UK showing a 12% reduction compared to the previous year.
The company’s product lineup remains heavily dependent on two models, with over 95% of sales coming from the Model 3 and Model Y. This concentration comes at a time when competitors like BMW are strengthening their position in Europe, and Chinese manufacturer BYD is gaining ground despite discussions about potential tariffs.
CFRA analyst Garrett Nelson maintains a bullish stance on Tesla, pointing to the potential of autonomous driving technology. Nelson estimates the global autonomous driving market opportunity at over $5 trillion, suggesting Tesla’s current stock price represents only a fraction of its potential value.
However, this optimistic outlook contrasts with immediate challenges facing the company. Weekend protests dubbed “Tesla Takedown” and “Tesla Takeover” occurred at multiple Tesla dealerships across the United States and international locations. Protesters gathered with signs opposing Musk’s political involvement and his role as head of the Department of Government Efficiency (DOGE).
Musk’s Political Activity
Recent polling data indicates growing public concern about Musk’s political activities. A Quinnipiac poll from January showed 53% of voters oppose Musk’s prominent role in the Trump administration, while only 39% support it. The American EV Jobs Alliance found even lower support among EV drivers, with just 35% viewing Musk positively and 42% expressing negative opinions.
Tesla’s brand perception has also shifted. Among EV competitors Ford, Toyota, and Volkswagen, Tesla recorded the lowest favorable rating at 63% and highest unfavorable rating at 37% in recent surveys of likely EV buyers.
Internal tensions have emerged as well. The Washington Post reported on a leaked recording of a Tesla staff meeting where employees expressed concerns about damage to the company’s brand. Senior managers reportedly indicated Tesla would benefit if Musk stepped down from his role.
The company faces additional market pressures as the Trump administration considers cutting federal EV tax credits. This change would remove a key sales incentive and force Tesla to compete more directly with foreign automakers on price.
Hedge fund interest remains substantial, with 99 hedge fund investors maintaining positions in Tesla stock. However, Oppenheimer analyst Colin Rusch notes that Musk’s political activities create potential risks for Tesla’s sales, particularly in California and the European Union.
JPMorgan Asset Management’s Kerry Craig suggests investors are looking beyond traditional AI technology leaders due to valuation concerns. Craig emphasizes opportunities along the AI value chain, including software companies and energy providers.
Tesla’s Q4 2024 performance showed mixed results. While the company reported better-than-expected earnings in late October, portfolio managers at Aristotle Atlantic Large Cap Growth Strategy noted the stock’s performance was influenced by expectations about autonomous driving regulation and potential changes to EV tax incentives.
The company’s next delivery report, due in early April, will provide more clarity on the impact of these challenges on Tesla’s global sales performance.
