The French government has just made a shocking decision when announcing that it will suspend the entire Tesla’s activities in the country, and apply strict restrictions on the American automobile industry. This move is considered unprecedented in the interrelated economic relationship, and the consequences have quickly spread, with the value of Elon Musk’s personal property – CEO of Tesla – reported to have dropped by about 138.9 billion USD in just a few days. The situation seems to have no signs of stopping.
According to internal sources, the main reason given by the French government is due to concerns about technology security, environmental impact and imbalance in bilateral trade. Tesla is accused of not complying with new regulations on component origin, while its electric car models are also questioned about emissions generated during production at factories in the US and China. Although there was no official statement from the company, Elon Musk briefly shared on social networks that he was “closely monitoring the situation and would have adequate feedback.”
This shock not only affects Tesla alone but also leads to a strong decline of the entire US electric car industry in the European market. Firms like General Motors and Ford also began to record canceled orders, plummeting stocks and European partners suspended cooperation. Investors, who had previously placed great expectations for the wave of US electric cars to conquer the global market, now fleeing from stock codes related to this field, causing a wave of selling on Wall Street.
Some analysts believe that the French move is not only technical but also a political reaction in the context of trade tensions between Europe and the US is increasing smoldering. Europe’s power to develop domestic brands such as Renault, Peugeot or Volkswagen makes Tesla’s strong presence in the region become a “strategic threat.” A series of other European countries is expected to follow the French in the coming weeks, making Tesla’s future in the old continent become more precarious than ever.
Elon Musk, who used to be a symbol of breakthrough in technology and clean energy, now faces a vital challenge. The loss of nearly 140 billion USD is only a superficial manifestation of a deeper crisis about the belief, market share and global strategy. Meanwhile, the world is waiting to see how Musk will turn the situation, or to accept a new chapter full of volatility in the technological empire that he has worked hard.
