Tesla Stock Drops 3.03% Amid China Sales Slump, European Rivalry

On June 5, 2025, Tesla's stock experienced a 3.03% drop in pre-market trading, reflecting investor concerns and market dynamics.

Tesla's recent performance has been marked by significant challenges in key markets. In China, the company's electric vehicle sales declined by 15% year-over-year in May, marking the eighth consecutive month of decrease. This downturn is attributed to intense domestic competition and a heated price war. Tesla's Shanghai factory, which produces the Model 3 and Model Y for both domestic and export markets, has seen a 17.6% year-over-year decline in sales for the first five months of 2025. In contrast, domestic rival BYD reported a 14.1% year-over-year increase in sales for the same period.

In Europe, Tesla faced stiff competition from BYD, which surpassed Tesla in new electric vehicle registrations in April. BYD's sales in Europe reached 7,231 units, a 169% increase year-over-year, while Tesla's registrations dropped by 49% to 7,165 units. This shift in market dynamics has raised concerns about Tesla's ability to maintain its leadership position in the electric vehicle sector.

Additionally, Tesla's CEO, Elon Musk, has been involved in a high-profile political dispute with the Trump administration. Musk's departure from his role as a special government employee and his subsequent criticism of the administration's policies have added to the uncertainty surrounding Tesla's future. The company's stock has been volatile, with investors grappling with multiple headwinds, including political risks and market competition.