Tesla’s European Sales Rout Continues. When Will It Be Time to Finally Walk Away From TSLA Stock?

Core Viewpoint - Tesla is facing significant challenges in maintaining its market share in Europe, with sales declining sharply while competitors like BYD are rapidly gaining ground [1][5][9]. Sales Performance - Tesla sold 8,220 vehicles in the European Union in August, a decrease of approximately 37% year-over-year [1]. - In the broader European Free Trade Association (EFTA) region, Tesla's sales fell 22% year-over-year, totaling 14,831 cars sold compared to BYD's 11,455 [6]. - Year-to-date, Tesla has sold 133,857 vehicles in the EFTA, reflecting a 33% decline from the previous year, while BYD's sales surged 280% to 95,940 [7]. Market Share - Tesla's market share in the EFTA dropped to 1.9% in August, down from 2.5% in the same period last year [9]. - In the U.S., Tesla's market share also decreased to 38% in August, the lowest on record, despite overall EV sales reaching a record high [9]. Stock Performance - Tesla shares have gained 9.4% year-to-date, with a notable rally in September attributed to CEO Elon Musk's $1 billion stock purchase and optimism surrounding AI and robotaxis [2]. - Following the recent sales data, Tesla's stock dropped over 4%, raising questions about the sustainability of its current valuation amidst declining sales [1][4]. Future Outlook - Analysts are divided on Tesla's future, with a consensus "Hold" rating on TSLA stock, reflecting concerns over declining sales and market share [14]. - The upcoming third-quarter delivery numbers are critical, with expectations that disappointing figures could lead to further declines in stock value [17]. - Tesla is expected to report Q3 earnings with an anticipated earnings per share of $0.50, down 30.54% year-over-year, and revenue of $25.04 billion, representing a slight decline [13].