The Direxion Daily TSLA Bull 2X Shares (TSLL) experienced a sharp 5.10% decline in pre-market trading on Monday, reflecting growing concerns about Tesla's performance and outlook. This leveraged ETF, which aims to deliver twice the daily performance of Tesla stock, was hit hard as investors reacted to a series of challenges facing the electric vehicle giant.

One of the primary factors contributing to the selloff was Tesla's weakening sales performance in Europe. In France, Tesla's deliveries plummeted to just 721 vehicles in May, marking a 67% year-over-year decline and the company's worst month in three years. This dramatic drop comes even after the introduction of the new Model Y, suggesting that Tesla's European market share may be eroding in the face of intensifying competition from Chinese EV manufacturers.

Adding to investor worries are ongoing concerns about Tesla's self-driving technology. The company is facing potential liabilities related to its "Full Self-Driving" (FSD) package, as it recently admitted that the current hardware (HW3) in millions of vehicles will not support true autonomous driving capabilities. This admission has raised questions about potential costly retrofits or legal challenges, further pressuring Tesla's financial outlook. Meanwhile, the company's high valuation multiples compared to its current financial performance and those of its tech peers are causing some analysts to question whether the stock's price reflects its near-term business reality.