Without fear of the "cliff-like" drop in European sales, Tesla, Inc. (TSLA.US) acquires partial assets of a bankrupt German parts manufacturer.

Although Tesla, Inc. (TSLA.US) encountered "troubles" in Germany, the American car manufacturer announced on Tuesday that it will acquire certain assets of the bankrupt German high-tech component manufacturer Manz AG, including its factory in Reutlingen, Germany, equipment, and over 300 employees. Manz AG stated that its bankruptcy trustees signed an acquisition agreement with Tesla, Inc. subsidiary Tesla Automation GmbH on Monday. Both parties agreed not to disclose the acquisition price, and the completion of the transaction is subject to merger control laws. Manz AG added that approximately 100 employees will lose their jobs and will not be transferred to Tesla Automation GmbH. This deal marks an expansion of Tesla, Inc.'s business scope in Germany, where the company already operates a gigafactory near Berlin. However, it is worth noting that this transaction comes at a time when Tesla, Inc.'s sales in the European market, including Germany, have significantly declined. Data shows that Tesla, Inc.'s car sales in Germany in January fell by nearly 60% year-on-year; European sales in January were only 9,900 vehicles, a decrease of over 45% year-on-year. Meanwhile, electric vehicle new car sales on the European mainland increased by over 37% in January, raising the electric share of the European car market to 15%. This indicates that Tesla, Inc.'s sales decline in Europe in January cannot be solely attributed to the European market environment. Analysts believe that there are multiple reasons for Tesla, Inc.'s sales decline in Europe in January. Tesla, Inc. CEO Musk has recently been making frequent statements in EU politics, openly supporting the German far-right party "Alternative for Germany" (AfD). This move has sparked widespread political controversy and is seen as potentially damaging to the brand image. Apart from political factors, consumer hesitancy is also a significant reason for the sales decline. Many consumers are delaying purchases as the new Model Y is set to be released in the first half of 2025. Additionally, Tesla, Inc.'s year-on-year sales comparison is challenging, as last January saw a surge in sales due to the redesign of the Model 3. Analyst Matthias Schmidt stated, "Despite this, the sales in January are still disappointing and may indicate that some consumers are turning to other brands." Troubles continue! Tesla, Inc.'s market value falls below $1 trillion On Tuesday, Tesla, Inc.'s stock price fell by over 8%, leading to a $89.2 billion market cap decline, dropping below $1 trillion in total market value, reaching the lowest level since November 7th of last year. Furthermore, data shows that Tesla, Inc.'s stock price has dropped by 25% since the beginning of 2025, far exceeding the 1.5% decline of the NASDAQ index during the same period. Tesla, Inc.'s stock price has also fallen by over 35% from its all-time high closing price on December 16th of last year. Tesla, Inc. has been facing a series of bad news recently. Besides the significant sales decline in Europe in January, according to data from the California New Car Dealers Association, Tesla, Inc.'s sales in California in the fourth quarter of 2024 decreased by 11.6% year-on-year. California has been Tesla, Inc.'s largest consumer area in the US market, and this data has raised more concerns in the market about Tesla, Inc.'s domestic sales situation in the US. Additionally, a report on Monday pointed out that Tesla, Inc.'s highly anticipated partial self-driving system upgrade did not meet the expectations of vehicle owners. Many users stated that the "city street navigation" feature introduced by Tesla, Inc. in the Chinese market fell short of Musk's promised fully autonomous driving level. Meanwhile, Chinese electric vehicle manufacturers such as BYD Company Limited have been offering similar autonomous driving features at lower prices or even for free, exacerbating investors' concerns about Tesla, Inc.'s competitiveness in the Chinese market. In addition to market competition pressure, investors are also worried about Musk's political moves. Musk is currently focusing a lot of his energy on leading the "Department of Government Efficiency (DOGE)" in Washington, DC, under the Trump administration. Under this leadership, Musk and his team have unprecedented access to the government's computer systems and taxpayer data, and have been authorized by the Trump administration to mass dismiss government agency employees responsible for regulating companies like Tesla, Inc. These actions have raised further questions about the future direction of Tesla, Inc. among the public. Musk's extreme political statements and activities have also led to consumer boycotts in multiple markets, leading to protests at Tesla, Inc. stores and service centers. In addition, the Trump administration recently announced massive tariffs on goods from Canada, Mexico, and China, further impacting Tesla, Inc.'s demand in overseas markets.