Shares of Tesla ( TSLA -8.39%) are trading lower on Tuesday. The company's stock lost 7.3% as of 10:45 a.m. ET and lost as much as 7.6% earlier in the day. The drop comes as the S&P 500 lost 0.9%, and the Nasdaq Composite lost 1.7%.

The electric carmaker faces increasing competition from Chinese manufacturers, particularly BYD, which offers standard features that Tesla charges extra for. While overall European electric vehicle sales grew by more than a third in January,

Overall EV sales in Europe surged 34% in January, while Tesla saw its sales across the continent plummet by a staggering 45%.