Tesla Inc.’s sales in Europe plummeted 45% in January, even as the region’s electric vehicle (EV) market surged, highlighting growing challenges for the Elon Musk-led company. According to the European Automobile Manufacturers’ Association, Tesla registered just 9,945 vehicles last month, down from 18,161 a year earlier.
Meanwhile, the broader EV industry saw a 37% increase in sales, with competitors like Volkswagen, Stellantis, and Renault posting strong growth in key markets like Germany and the UK. Tesla’s registrations in Germany dropped to 1,277, their lowest monthly total since July 2021, while sales in France plunged 63%. For the first time, Tesla trailed China’s BYD in the UK, where its sales dipped nearly 8% amid a 42% EV market expansion.
The decline comes as Tesla transitions its production lines to update the Model Y SUV, its best-selling vehicle. The company warned last month that the redesign would lead to weeks of lost output. However, analysts suggest other factors may be at play, including Musk’s increasingly polarizing political activity.
Musk, a major donor to Donald Trump, has recently waded into European politics, supporting far-right parties and clashing with leaders in Germany and the UK. In January, he hosted Alternative for Germany (AfD) leader Alice Weidel in a live discussion on his social media platform, X, and later made controversial remarks at an AfD rally that coincided with Holocaust remembrance events. He also called for the imprisonment of UK Prime Minister Keir Starmer while advocating for the release of far-right activists.
Polling by YouGov in Germany and the UK found Musk’s political involvement widely unpopular, adding to concerns that his influence may be tarnishing Tesla’s brand in Europe.
Despite Tesla’s struggles, European automakers are under mounting regulatory pressure to ramp up EV sales ahead of tighter emissions targets in 2025. While Tesla works to overcome its production challenges, competitors are poised to capitalize on the shifting landscape.
