What Happened?
Shares of electric vehicle pioneer Tesla (NASDAQ: TSLA) fell 1.3% in the afternoon session after reports revealed a significant slump in its European sales for July, fueling concerns about increasing competition.
The electric vehicle maker's sales in Europe plunged by approximately 40% year-over-year, with various reports showing a drop to around 8,800 vehicles. This decline is particularly concerning as the broader European EV market expanded. Compounding the issue, Chinese rival BYD's sales surged, with its new car registrations outselling Tesla in the region. This consistent loss of ground in major markets is weighing on investor sentiment.
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What Is The Market Telling Us
Tesla’s shares are extremely volatile and have had 46 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock gained 6.1% on the news that dovish comments from Federal Reserve Chair Jerome Powell sparked a broad market rally, boosting investor sentiment for risk assets. Powell's remarks at the Jackson Hole Symposium were interpreted by traders as hinting at a potential interest rate cut, which is often seen as a positive for stocks. The news lifted risk assets and sparked a broad market rally, with large technology companies seeing significant gains.
Tesla is down 8.7% since the beginning of the year, and at $346.30 per share, it is trading 27.8% below its 52-week high of $479.86 from December 2024. Investors who bought $1,000 worth of Tesla’s shares 5 years ago would now be looking at an investment worth $2,348.
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