Tesla finds itself navigating dual challenges across the Atlantic. In its home market, a key regulatory agency has initiated a probe into the company’s “Full Self-Driving” (FSD) technology. Simultaneously, the electric vehicle manufacturer is confronting a significant sales downturn in Europe, prompting a strategic pricing shift from CEO Elon Musk. These concurrent pressures threaten to impact the long-term growth narrative central to the company’s valuation.
European Sales Slump Triggers Pricing Strategy Shift
The competitive landscape in Europe presents a distinct hurdle for Tesla. Industry-wide EV sales are climbing, yet Tesla’s deliveries in the region have fallen by approximately 30 percent so far this year. Increased competition from established European automakers and Chinese rivals, including BYD, is applying considerable pressure.
In a direct response to this trend, Tesla has launched a more affordable “Model 3 Standard” variant in Germany, priced just under 38,000 euros. Targeting cost-conscious consumers, this model forgoes certain premium features but maintains a range exceeding 480 kilometers. Market analysts interpret this move as a defensive play designed to stabilize sales volume in an intensely competitive environment.
U.S. Safety Agency Investigates Full Self-Driving System
Adding to the company’s headwinds, the U.S. National Highway Traffic Safety Administration (NHTSA) has opened a preliminary investigation into Tesla’s FSD system. The probe was triggered by reports documenting at least 80 incidents where vehicles operating in autonomous mode allegedly committed traffic violations. Specific concerns include running red lights, entering oncoming traffic lanes, and executing improper lane changes at intersections.
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This regulatory scrutiny arrives at a pivotal moment. Tesla has positioned autonomous driving technology as a core future value driver, especially for its planned robotaxi service. While the company is already deploying FSD in Texas and California, heightened regulatory oversight could disrupt ambitious rollout timelines, including aspirations for European regulatory approval.
Share Price and Critical Timeline Ahead
Despite these developments, Tesla’s stock has demonstrated resilience. Shares closed the recent week at 390.55 euros, maintaining a distance of roughly 14 percent from the 52-week high of 457.05 euros.
Looking forward, the first quarter of 2026 is shaping up to be a decisive period for the company’s trajectory. Quarterly results are scheduled for January 28, coinciding with the European delivery launch of the new Model 3. February holds particular significance: Dutch authorities are expected to decide whether to grant approval for the supervised FSD system, a decision that will be closely watched in light of the ongoing U.S. investigation.
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