TLDR:
- Tesla stock showed mixed performance, rising 1.1% in premarket trading despite year-to-date losses
- Tesla delivered 337,000 cars in Q1 2025, down 13% year-over-year – the worst quarterly decline in company history
- European market share dropped from 2.9% to 1.8%, a 37% decline in one year
- German sales fell 46% and UK sales plunged 62% in April 2025
- Tesla plans to launch robotaxi service in Austin this June, but analysts question if the Full Self-Driving technology is ready
Tesla is facing dual challenges in Europe and with its autonomous driving technology as the electric vehicle maker prepares for its robotaxi launch next month.
The company saw its stock rise 1.1% in premarket trading on Wednesday, reaching $278.44. This modest gain came despite Tesla being down more than 30% year-to-date.
The share price movement contrasted with Tesla’s sales performance. First-quarter deliveries totaled about 337,000 cars, representing a 13% drop from the same period last year.
This marked the worst quarterly decline in Tesla’s history. Wall Street now projects annual sales of 1.7 million vehicles in 2025, down from 1.8 million in 2024.
Despite these challenges, Tesla stock had gained nearly 50% over the past 12 months before Wednesday’s trading session. This growth largely stems from investor optimism about self-driving technology.
European Market Collapse
Tesla’s European position has deteriorated rapidly. Its market share in Europe fell to 1.8% from 2.9% a year ago – a 37% drop.
Germany, Tesla’s second-largest European market, saw sales plummet by 46% year-over-year in April. The company sold just 885 vehicles there last month, marking its fourth consecutive monthly decline.
German sales for 2025 are down more than 60% year-to-date according to data from the KBA federal motor transport authority.
The UK market, which had been relatively stable earlier in 2025, saw April sales crash by 62% compared to last year. Only 512 new Teslas were registered, the lowest monthly figure in over two years.
Tesla’s share of the battery electric vehicle market across Europe has been cut in half, dropping from 21.6% to 10.3%. This suggests Tesla is losing ground not just in the overall auto market but specifically to other EV competitors.
Some analysts attribute part of the European decline to CEO Elon Musk’s political activities. His alignment with US President Donald Trump and involvement in government initiatives may have damaged Tesla’s image abroad.
Self-Driving Ambitions
While European sales struggle, Tesla is weeks away from a planned robotaxi launch in Austin, Texas. However, questions remain about whether the company’s self-driving technology is ready.
Piper Sandler analyst Alexander Potter, who maintains a Buy rating with a $400 price target, notes that “By a wide margin, Tesla’s full self-driving (FSD) software is the largest contributor to our price target.”
Potter hosted a call with Elias Martinez, creator of the FSD Community Tracker website. The site monitors key statistics about Tesla’s autonomous driving system.
In May, the tracker showed that 94% of FSD drives had no “critical disengagement.” While impressive, this still means 6% of rides required human intervention.
“After the [investor] call, it seems evident that the current version of FSD software (version 13) cannot support truly autonomous vehicles,” Potter wrote.
Tesla has not released major updates to version 13 in over four months. Martinez suggests the company might be focusing on specific improvements for the Austin launch, such as enhanced mapping to help identify hard-to-see stop signs.
The company plans to launch its robotaxi service in June despite these concerns. Investors will need to wait until then to see if the technology performs as promised.
Tesla plans to release a revamped Model Y to help recover market share in Europe. However, it may need more than a design refresh to reverse negative sentiment in markets where its popularity has declined.
