TLDRs;
- Tesla stock climbs after unveiling a cheaper Model 3 Standard for Europe.
- New budget EV aims to revive weak European sales and outprice key rivals.
- China demand strengthens and Norway sets new sales records for Tesla vehicles.
- FSD update draws regulatory backlash, adding near-term risk for TSLA investors.
Tesla’s stock is gaining fresh momentum as the company rolls out a new low-cost Model 3 Standard across Europe, an aggressive strategic move aimed at restoring market share in a region where sales have softened considerably in 2025.
Shares of Tesla, Inc. (NASDAQ: TSLA) hovered around $454.53 on December 5, 2025, up roughly 1.7% from the previous session and extending a broader rally that has lifted the stock nearly 20% from its November lows.
The renewed optimism comes at a time when investors are digesting a range of developments, from shifting global demand trends to controversial updates in Tesla’s Full Self-Driving (FSD) software. As trading unfolds, the market’s response suggests that the new budget Model 3 is emerging as the day’s most tangible catalyst.
New Model 3 Standard Debuts
The headline mover is Tesla’s introduction of a more affordable Model 3 Standard in Europe, priced at €37,970 in Germany with an estimated 480 km range.
This marks a significant undercutting of the current Model 3 lineup, with the premium variant priced nearly €8,000 higher. Deliveries are expected to begin in early 2026, but investor excitement is arriving early, reflecting strong anticipation for the model’s competitive positioning against Volkswagen, BYD and emerging sub-$30,000 EV rivals.
The launch is strategically timed: European registrations have slipped roughly 30% year-to-date through October, and global deliveries are expected to fall around 7% in 2025. The new trim is designed to rebuild volume, re-establish pricing power and reinforce Tesla’s foothold in a region where regulatory dynamics, incentives, and consumer preferences have shifted rapidly.
China and Norway Offer Bright Spots
While Europe continues to deliver mixed signals, China and Norway are providing crucial stability for Tesla’s 2025 performance. China, Tesla’s largest international market, recorded a nearly 10% year-over-year jump in November sales of locally produced Teslas, the strongest annual growth in more than a year. Month-over-month demand surged 41% on the back of new Model Y variants and strong export activity.
Norway, long considered Tesla’s European stronghold, set a new all-time record for annual vehicle sales by any automaker, surpassing 28,600 units by November. This represents a 34.6% year-to-date increase, cementing Tesla’s dominance in one of the world’s most electrified car markets.
These pockets of strength highlight why the budget Model 3 is so vital. Robust performance in China and Norway can only offset broader European weakness for so long; Tesla needs a mass-market product refresh to stabilize overall delivery growth heading into 2026.
FSD Update Sparks Regulatory Concerns
Beyond vehicle launches, Tesla is facing renewed regulatory scrutiny following the rollout of FSD version 14.2.1. The update permits texting under specific traffic conditions while FSD is engaged, a feature critics argue introduces new risks while the system remains classified as Level 2 automation.
U.S. regulators, already investigating nearly 2.9 million Tesla vehicles tied to FSD-related incidents, may intensify oversight in response.
While the company frames the update as part of its iterative progress toward fully autonomous driving, investors recognize the potential for fines, recalls or delays to Tesla’s robotaxi timeline.
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