Tesla Sales Plummet 45% in Europe as Rivals’ EV Registrations Surge

Tesla’s sales in Europe have fallen dramatically, dropping 45% last month to reach a two-year low as competitors in the electric vehicle (EV) market experienced a significant uptick in demand. According to the European Automobile Manufacturers’ Association, the Elon Musk-led company registered just 9,945 cars in January, a sharp decline from 18,161 units sold during the same month last year.

While Tesla struggled, the overall EV market in Europe thrived, with sales increasing by 37%. Notably, major gains were reported in Germany and the UK, underscoring the growing competition Tesla faces from established carmakers.

The decline in Tesla’s sales coincides with a transition in its production lines for the Model Y SUV, the company’s most popular vehicle. Additionally, Musk’s increasing polarisation in global politics may be affecting consumer sentiment. Following his prominent support for Donald Trump during the last US election cycle, Musk has turned his attention to Europe, backing far-right political movements and clashing with European leaders.

In Germany, Tesla’s registrations plummeted to just 1,277 vehicles, the lowest monthly total since July 2021. France saw an even steeper decline, with sales falling 63%—the worst performance since August 2022. In the UK, for the first time, Tesla registered fewer vehicles than China’s BYD Co., while overall EV sales in the market grew by 42%.

Polling conducted by YouGov in mid-January indicated Musk’s unpopularity in Germany and the UK, with many respondents viewing his political interventions unfavorably. His recent live discussion with Alice Weidel, leader of the far-right Alternative for Germany party, has drawn criticism, particularly given the timing of his comments ahead of the 80th anniversary of the liberation of Auschwitz.

Furthermore, Musk’s provocative statements, including calls for the imprisonment of UK Prime Minister Keir Starmer and support for jailed far-right activists, have added to the controversy surrounding him.

Tesla’s inventory shortages in certain markets, resulting from aggressive sales strategies late last year, likely contributed to the January slump. CFO Vaibhav Taneja acknowledged during the company’s quarterly earnings call that the shift to a redesigned Model Y would lead to several weeks of lost production. The Model Y is produced at four plants globally, including a facility near Berlin.

Competition in the European market remains fierce, led by manufacturers such as Volkswagen AG, Stellantis NV, and Renault SA. These companies are under increasing regulatory pressure to enhance their EV offerings in light of stricter CO2 emissions targets set by the European Union for 2025 and rising zero-emission sales requirements in the UK through 2035.