Tesla’s European Sales Plunged for a Fifth Straight Month. Should You Sell TSLA Stock Here?

Tesla (TSLA) lost as much as 5% on Wednesday after European Automobile Manufacturer Association data confirmed its sales continued to struggle in Europe last month. 

In May, the automaker sold 13,863 vehicles in the region – down nearly 28% on a year-over-year basis as customers favored more affordable and features-rich EVs from Chinese automakers. 

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Tesla stock is now down some 10% versus its recent high. 

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Shrinking Market Share Stands to Hurt Tesla Stock

May marked the fifth consecutive month of declining sales in Europe, which is alarming given that overall EV sales in the region were actually up more than 25% last month. 

Continued sales declines amidst intense competition from the likes of BYD (BYDDY) have contracted Tesla’s European market share to just 1.2% - raising concerns about pricing power, brand momentum, and regional strategy. 

What it signals is that the company’s product lineup and positioning may be losing relevance in key international markets, which could hurt future growth and investor confidence moving forward.  

Could the Robotaxi Save Tesla?

Morgan Stanley’s senior analyst Adam Jonas downplayed the ACEA data and reiterated his bullish view on Tesla stock in a research note today.  

According to him, the company’s future value depends more on its robotaxi initiative and less on its overall footprint in electric vehicles at large. 

TSLA had a successful launch of its robotaxis in Austin on June 22 – and the company’s share price will likely surge further as it scales its autonomous operations in the back half of this year, Jonas added. 

Adam Jonas currently has a $410 price target on Tesla, indicating potential upside of another 25% in the EV stock from here. 

Other Wall Street Firms Are Cautious on Tesla

While Jonas is focusing entirely on the robotaxi launch, other Wall Street analysts seem concerned about the market share that TSLA keeps losing in its core electric vehicles business. 

According to Barchart, the consensus rating on Tesla stock currently sits at “Hold” only with the mean target of about $293 indicating potential downside of some 10% from current levels. 

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On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.