Al Root

Tesla stock was lower in early trading Friday after January data from China revealed a drop in sales. Investors, however, shouldn't get to worked up over January's numbers.

For the month, Telsa sold 63,238 from its plant in Shanghai, according to the China Passenger Car Association. Tesla doesn't report monthly or regional sales numbers. That's down 11.5% year over year and down almost 33% from December.

Tesla stock was off 0.8% in premarket trading at $371.53, while S&P 500 and Dow Jones Industrial Average futures were both close to flat.

Investors are starting to get nervous about falling sales. Tesla's Californian sales dipped 8% year over year in the fourth quarter, its fifth consecutive quarterly decline.

More recently, Tesla's January sales in France dipped 63% year over year. In Germany, where CEO Elon Musk said at a recent political rally there was "too much of a focus on past guilt," as Germany remembered the freeing of the last people from the concentration camp of Auschwitz, Tesla sales dropped 60%.

Now, there is China, leaving investors wondering where sales are growing. Overall, Tesla posted record fourth-quarter sales of about 496,000 vehicles, up about 2% year over year. Total sales in the U.S., despite the California dip, rose 3% in the fourth quarter. Tesla sold almost 200,00 cars in China in the fourth quarter, a record, and up about 16% year over year.

January, however, just isn't a great month for car sales. It was the lowest month for U.S. car sales in 2023 and 2024. A decline is not unexpected.

China's EV leader BYD sold about 296,000 passenger vehicles in January -- both fully electric and plug-in hybrid. That was up about 48% year over year, but it was down about 42% compared with December. BYD's sequential drop was larger than Tesla's.

Despite any seasonality, falling sales, of course, are a watch item for investors, especially as investors wonder if Musk's political activities are turning off buyers. It will just take a few more months to divine a trend.

Tesla is expected to grow car sales in 2025. Wall Street projects about 2 million vehicles sold, up from 1.8 million in 2024. An updated Model Y and a new lower-price vehicle analysts call the Model 2 should help.

The Model 2 isn't on sale yet. Investors would like to see it soon.

Coming into Friday trading, Tesla stock was up about 100% over the past 12 months, up almost 50% since the Nov. 5 presidential election, but down about 12% since the Jan. 20 inauguration.

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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February 07, 2025 08:58 ET (13:58 GMT)

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