Tesla’s share price fell by 3.79% to close at $327.55 on Wednesday following troubling data that revealed a continued Tesla sales slump in Europe. According to the European Automobile Manufacturers Association (ACEA), Tesla’s new car sales plunged by 27.9% in May, the fifth consecutive monthly decline, despite a 27.2% increase in overall fully electric vehicle (EV) sales across the region. The updated Model Y, intended to rejuvenate Tesla’s product lineup, has so far failed to reverse the downward trend in the company’s European performance.
The U.S. automaker’s market share in Europe slipped to 1.2% in May, down from 1.8% a year earlier. The overall car market in Europe, however, grew by 1.9%, with a notable increase in sales of plug-in hybrids and other alternatively fuelled vehicles. This broader growth has left Tesla increasingly vulnerable to rising competition, especially from Chinese EV makers offering more cost-effective options.
Challenges Pile Up: Product Stagnation, Competition, and Controversy
Industry experts cite Tesla’s ageing model lineup and intensifying competition from both traditional European automakers and emerging Chinese brands as key contributors to the ongoing Tesla sales slump in the European market. Moreover, public perception of Tesla CEO Elon Musk has reportedly affected consumer sentiment. Musk’s controversial political engagements, including a recent dispute with former President Donald Trump over U.S. government spending and his resignation from a budget oversight role, have further complicated Tesla’s public image.
The updated Model Y, released to breathe new life into Tesla’s portfolio, has not yet made a significant impact in reversing the brand’s decline. Meanwhile, the company’s sales in Europe from January through May 2025 dropped a steep 45.2% compared to the same period in the previous year. This deepening Tesla sales slump dragged its total share of the European auto market has fallen sharply to 1.1%—down from 2% just a year ago—despite the broader EV sector experiencing a healthy 26.1% growth during the same timeframe.
Technical Analysis Suggests Potential Rebound
While the fundamentals present a mixed outlook, technical experts are cautiously optimistic about Tesla’s stock performance. Kapil Shah, a technical analyst from Emkay Global and trainer at Finlearn Academy, notes that Tesla shares have largely remained range-bound between $170 and $340 over the past 55 months, indicating a mildly positive trend. Recently, the stock found key support near the $241 mark and exhibited a bullish follow-through, hinting at renewed investor interest.
Shah added that a sustained breakout above the $355 resistance level could serve as a critical turning point, potentially pushing the share price towards the $400 mark. This would represent a medium-term trend reversal for the electric vehicle giant, contingent upon stronger product performance and improved investor sentiment.
As Tesla navigates increasing pressure from global competitors and shifting consumer preferences, both its sales strategy and public perception will be under scrutiny in the months ahead, especially as it works to recover from the ongoing Tesla sales slump in key global markets.
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