WASHINGTON, United States (AFP) – Shares of the US electric vehicle pioneer Tesla slumped nine per cent Tuesday, as investors digested disappointing European sales and chief executive Elon Musk’s aggressive foray into politics.

The auto giant sold less than 10,000 units in Europe last month, down 45 per cent from a year earlier.

The fall in Tesla’s share price dragged its market capitalisation back below $1 trillion for the first time since November 2024.

Musk has taken on a controversial advisory role in US President Donald Trump’s administration, charged with slashing government spending.

He has also voiced strong support for far-right political leaders in Europe — including in the recent German elections — sparking criticism from some European politicians.

Tesla’s share price surged in the wake of the 2024 US presidential election, with investors betting that Musk’s proximity to Trump could help his companies succeed.

The poor sales figures in Europe appear to have punctured that optimism — at least for now — and raised concerns that what may be popular in the United States could in fact be detrimental to the company’s success elsewhere.

Alongside its European struggles, Tesla also faces stiff competition from automakers like BYD in China — a key market for electric vehicles.

Earlier this week, the company announced it would start offering advanced self-driving functions for its cars in China, shortly after BYD said it would introduce self-driving technology for nearly all its vehicles.