• Tesla shares extend losses, down 11.2% in afternoon trading amid worsening sales trends.
  • China deliveries fall for seventh straight month; European markets show sharp declines despite broader EV growth.
  • Regulatory scrutiny over FSD technology and robotaxi launch plans add to investor concerns.

Mounting Pressure in Key Markets

Tesla's stock continued its downward spiral Thursday afternoon, shedding another 11.2% as fresh data confirmed deepening sales struggles in critical international markets. The electric vehicle maker saw deliveries of China-made vehicles drop 15% year-over-year in May—marking seven consecutive months of declines in its second-largest market. European figures proved equally troubling, with Germany reporting a 36% sales plunge despite overall EV market expansion in the region.

"The numbers confirm what we've been seeing in real-time data—Tesla is losing ground to local competitors just as its product cycle transitions," said one analyst who asked not to be named discussing sensitive market movements. Chinese automaker BYD and other domestic players continue to gain share through aggressive pricing and faster model refreshes.

Regulatory Headwinds Compound Challenges

The sales slump coincides with heightened scrutiny from U.S. safety regulators examining Tesla's Full Self-Driving technology. With the company preparing to debut its robotaxi service in Austin, Texas next month, investors appear increasingly nervous about potential regulatory roadblocks. Three people familiar with the matter said NHTSA investigators have been conducting unannounced visits to Tesla facilities in recent weeks.

Meanwhile in Europe, some industry watchers attribute part of the sales weakness to consumer backlash against CEO Elon Musk's recent political activities. "There's definitely a sentiment shift happening," noted a Berlin-based auto analyst, pointing to organized protests at Tesla showrooms in Scandinavia and Germany last quarter.

When reached for comment, a Tesla spokesperson pointed to upcoming product launches but declined to address specific market figures. The company has previously attributed sales fluctuations to seasonal factors and model transitions.

What Comes Next

All eyes now turn to Tesla's Austin robotaxi demonstration event scheduled for August 8—a make-or-break moment for Musk's autonomous driving ambitions. Meanwhile, factory retooling continues at several facilities as Tesla prepares updated versions of its Model Y and Model 3 vehicles. Whether these moves can stem the sales erosion remains unclear, with Wall Street analysts sharply divided on Tesla's near-term prospects. At least three major firms downgraded the stock Thursday afternoon, with one citing "fundamental deterioration in core markets that can't be ignored."