Tesla shares rallied 1.1%, erasing earlier losses. The shares briefly dropped more than 2.5% in premarket trading.
Tesla shares fell almost 6% on Wednesday as data from Europe showed slowing sales last month, and investors grew increasingly concerned about President Donald Trump’s plan for tariffs.
The European Automobile Manufacturers’ Association (ACEA) revealed on Tuesday that Tesla saw a 40% year-over-year drop in new vehicle registrations in Europe in February, while overall battery electric vehicle sales were up 26%.
Meanwhile, the White House said on Wednesday that President Trump will announce new tariffs on auto imports in the afternoon. The president has hyped April 2 as “liberation day” and “the big one” for rolling out his plan to impose heavy tariffs on foreign trading partners, but Trump hinted earlier this week that auto tariffs could arrive sooner.
Movements of this magnitude have become commonplace for Tesla’s stock. On 14 separate days this year, Tesla shares have gained or lost at least 5%. Wednesday’s selloff, alongside a 2% drop in the Nasdaq, followed a five-day rally that included a 12% jump on Monday.
The trend for the year has been downward, particularly since President Trump began his second term in January, and brought Tesla CEO Elon Musk with him to the White House. Tesla shares are down 36% since Inauguration Day, after falling 28% in February, the steepest drop for any month since December 2022.
Following the ACEA report on Tuesday, RBC analysts wrote in a note that the February numbers only represented a drop of about 11,000 Tesla vehicle registrations in Europe, and emphasized that data for the month “might not be indicative of true demand.”
New car buyers in Europe, the analysts said, “could be holding out for the Model Y refresh,” or a “new affordable model,” which they expect in the second half of the year.
Tesla is set to fully ramp up production of the redesigned version of its Model Y SUV next month. The company implemented partial production shutdowns at certain factories earlier this year to upgrade Model Y manufacturing lines.
Some prospective EV buyers have been turned off of late by Musk’s political rhetoric and his work for the Trump administration, where he’s leading an effort to slash federal government spending, cut the federal workforce, and has said he wants to privatize many services, including social security.