Tesla Sales Are Still Falling in Europe. Should You Buy, Sell, or Hold TSLA Stock Now?

Tesla (TSLA) has long been the undisputed leader of the electric vehicle (EV) revolution, but its brand no longer shines with the same electric glow. CEO Elon Musk’s controversial ties with President Donald Trump and growing political entanglements in 2025 have rubbed many the wrong way. The fallout has been brutal, leading to boycotts and even incidents of vandalism reported at Tesla stores. Investors aren’t happy, and neither are many customers. Tesla’s sales are slipping across the board, with rival automakers racing ahead and eating up global EV market share. In fact, Tesla’s European sales slump showed no signs of recovery in April, with sharp declines across major markets. In France, the EU’s second-largest EV market, Tesla managed to register just 863 new vehicles in April, down a staggering 59% year-over-year. That marks its weakest monthly performance in over two years. In Denmark, the numbers were even more severe. April deliveries tumbled 67.2% from the prior year, compounding a 65.6% drop in March. This ongoing slump highlights the growing pains for Tesla’s brand, with its market share in Europe steadily shrinking under increasing competition and Musk’s political side quests. So, with headwinds piling up for the EV giant, how should investors approach TSLA shares now? About Tesla StockWhile Tesla (TSLA) built its name on EVs, the company’s ambition stretches far beyond the road. With ventures spanning energy storage, robotics, and automation, this Texas-based trailblazer is steadily transforming into a full-spectrum tech powerhouse. The company’s market cap presently stands at approximately $903.5 billion.But despite its strengths and ambitions, Tesla’s brand has taken a serious beating this year, and the damage is clearly showing in its stock performance. The EV maker is now the worst-performing stock among the elite “Magnificent Seven” group, with its share down nearly 30% so far this year. In contrast, the S&P 500 Index ($SPX) has slipped only 3.4% in 2025. www.barchart.com Although Tesla's valuation has cooled from earlier levels, the stock still commands a lofty 198 times forward earnings and 9.30 times sales. These figures are significantly higher than the sector averages of 14.47x and 0.80x, reflecting the market’s enduring optimism and the high expectations still placed on the EV leader.Tesla Soars Even After Its Weak Q1 Performance Tesla’s first quarter earnings report, published on April 22, was nothing short of a disaster. The EV titan posted total revenue of $19.3 billion, down 9% year-over-year and well below the $21.3 billion Wall Street had anticipated. Earnings were even more disappointing, with adjusted EPS tumbling to $0.27, a staggering 40% drop year-over-year and a 34.9% miss compared to Wall Street estimates.The company’s core automotive business took the hardest hit, with revenue plunging 20% from $17.4 billion to roughly $14 billion. Under Musk’s leadership, Tesla’s operations are clearly feeling the strain. The company, however, blamed part of the revenue slump on essential upgrades at its four factories as it gears up to launch a refreshed Model Y.Plus, lower average selling prices and increased sales incentives weighed heavily on both revenue and profits. With challenges mounting, Tesla took a cautious tone moving forward. Instead of offering growth targets, the company opted to put 2025 guidance on hold, simply stating it will “revisit our 2025 guidance in our Q2 update.” However, despite such a bruising quarter that fell well short of Wall Street expectations and management’s cautious tone, Tesla shares closed up nearly 5.4% on April 23. The unexpected rally came after Musk pledged to refocus his energy on Tesla, vowing to scale back his time spent on government affairs. Musk’s comment during the Q1 earnings call that his involvement with the Department of Government Efficiency (DOGE) would “drop significantly” starting in May was enough to soothe investor nerves and steal the spotlight from the disappointing numbers.What Do Analysts Expect for Tesla Stock?Wall Street still appears cautious about TSLA stock, maintaining a consensus rating of “Hold” overall. Of the 41 analysts offering recommendations, 16 advise a “Strong Buy,” two suggest a “Moderate Buy,” 13 give a “Hold,” and the remaining 10 maintain a “Strong Sell.” Although the stock trades above its average analyst price target of $283.14, the Street-high price target of $465 suggests that TSLA could rally as much as 65.8% from here. Musk’s pledge to spend less time on government duties may have calmed investors, but concerns around his juggling act as both Tesla CEO and head of DOGE still linger. With the brand taking heavy hits, European sales in freefall, and rivals gaining ground fast, the company’s once-unshakable dominance looks increasingly vulnerable. Thus, for now, it might be wise for investors to keep this stock on watch and steer clear of any bold moves until the road ahead looks clearer. www.barchart.com On the date of publication, Anushka Mukherji 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.