Tesla stock jumps 7% despite sales slump in Europe

So, what drove the EV stock higher?

Tesla (NASDAQ: TSLA) stock was soaring on Tuesday, rising about 7% on a day when the European Automobile Manufacturers’ Association reported significantly slower sales for Tesla in Europe last month.

That bad news was offset by good news about Tesla’s CEO Elon Musk. Musk, on his X social media site, said over the weekend that he will be spending more time running his companies and less time at his government job in the Department of Government Efficiency (DOGE).

“Back to spending 24/7 at work and sleeping in conference/server/factory rooms. I must be super focused on 𝕏/xAI and Tesla (plus Starship launch next week), as we have critical technologies rolling out,” Musk wrote in a post on X last Saturday.

This follows a statement on Tesla’s earnings call last month when Musk said his time spent working for DOGE will drop significantly in May.

“Starting next month, I’ll be allocating probably more of my time to Tesla and now that the major work of establishing the Department of Government Efficiency is done,” Musk said on the call.

Also, last week at the Qatar Economic Forum, Musk said he will be doing a “lot less” political spending in future elections.  

“If I see a reason to do political spending in the future, I will do it,” Musk said, reported the Associated Press. “I do not currently see a reason.”

This renewed focus on Tesla certainly pleased investors and Wall Street analysts, many of whom have been calling for him to curtail his political involvement and fully commit to Tesla.

Sales drop significantly in April

What may have also lifted Tesla stock on Tuesday was an overall positive day for stocks as the Dow Jones rose 720 points, the S&P 500 jumped 117 points, or 2%, while the Nasdaq surged 450 points, or 2.4%. The catalyst was likely reinvigorated trade talks with the U.S. which had stalled.

Last week, President Donald Trump said discussions with the EU were “going nowhere” and he recommended a 50% tariff on EU imports starting June 1. Over the weekend, representatives from the EU and US spoke on tariffs and, according to a post on X by European Commission President Ursula von der Leyen, the EU was “ready to advance talks swiftly and decisively.” As a result of the renewed trade talks, the EU tariffs were delayed until July 9.

This offset bad news on the sales front for Tesla. According to a May 27 release by the European Automobile Manufacturers’ Association, Tesla sales in Europe dropped 53% year-over-year in April to just 5,475 units, based on new car registrations. It was the steepest drop of any automaker in Europe except for Jaguar. Tesla’s share of sales in Europe fell from 1.3% in April 2024 to 0.6% in April 2025.

For January through April 2025, Tesla sales have fallen 46% year-over-year to 41,677 based on new car registrations, with its share falling from 2.1% to 1.1%.  

Tesla stock has recovered in the past month, gaining 27%, but it is still down 10% YTD. Its P/E ratio is still extremely high at 193.