Tesla's stock price plummeted by 8.39%, accumulating a decline of 25% this year, with the market value falling below 1 trillion US dollars

[PCauto] On February 25th, Tesla's stock price plummeted by 8.39%, closing at $302.8, with its market capitalization falling below $1 trillion, evaporating $89.2 billion overnight. Since the beginning of the year, Tesla's stock price has cumulatively dropped by 25%, and CEO Musk's net worth has evaporated by over $100 billion.

Market analysts believe that this stock price decline is mainly affected by the underperformance of the autonomous driving system upgrade. Reports indicate that the much-anticipated partial upgrade of Tesla's autonomous driving system did not meet owners' expectations. Many users stated that Tesla's "city street navigation" feature in China did not fulfill Musk's promises regarding autonomous driving technology. In contrast, other Chinese electric vehicle manufacturers, including BYD, offer partial autonomous driving systems for free or at lower costs, with Xiaomi SU7 even including autonomous driving as a free standard feature.

Additionally, Tesla is also performing poorly in the European market. Although overall electric vehicle sales in Europe increased in January, Tesla's sales have nearly halved. In Germany and France, Tesla's sales dropped by 59% and 63% respectively, and in the UK market, it was surpassed by BYD. Data from the European Automobile Manufacturers Association shows that Tesla's sales in the EU plummeted by 45% in January, in stark contrast to the overall industry's electric vehicle sales surge of 37%.

In terms of performance, Tesla's fourth-quarter earnings and sales both fell short of analysts' expectations, with automotive revenue down 8% year-over-year and operating income plummeting by 23%. The company's report at the end of January pointed out that the average selling price reductions for models such as the Model 3, Model Y, Model S, and Model X were the main reasons for the performance decline. According to data from the California New Car Dealers Association, Tesla's sales in the state fell by 11.6% in the fourth quarter of 2024, and California was once Tesla's largest market in the United States.

Apart from market performance and business issues, some of Musk's actions have also drawn attention. Musk is a major supporter of President Trump's campaign, having donated $290 million to Republican candidates and related causes in 2024, mostly to support Trump's return to the White House. Currently, Musk is spending a significant amount of time in Washington, leading Trump's so-called Department of Government Efficiency (DOGE), which has raised concerns among Tesla shareholders, partly due to the company's performance and partly due to Musk himself.

litical statements and actions have led to organized protests against him in multiple markets, including at Tesla stores and service centers. Earlier this month, Trump announced extensive tariffs on goods from Canada, Mexico, and China, coupled with a decline in Tesla's vehicle registrations in Europe during January and February, leading to a drop in Tesla's stock price.

Despite the sharp decline in stock price, Musk remains the world's richest person, with a wealth valuation of approximately $380 billion. Tesla's official customer service responded that this update is being rolled out in batches as part of an official gray test. However, as of now, neither Musk nor Tesla have immediately responded to requests for comments from media outlets such as CNBC regarding the stock price crash and related issues.

Furthermore, the latest reports show that Tesla has decided to acquire part of the assets of the bankrupt German automotive parts supplier Manz, taking over the factory and equipment located in Reutlingen, Germany, along with more than 300 employees. This move is particularly noteworthy against the backdrop of Tesla's plummeting stock price and poor market performance, and whether it will bring positive effects to Tesla remains to be seen.