Tesla’s sales in Europe plummeted 44% last month, marking one of the most significant declines for the Texas-based electric vehicle (EV) maker in recent years. The drop, recorded across 25 European countries—including the UK, Norway, and Switzerland—comes amid growing concerns among shareholders that Elon Musk’s controversial political interventions are turning off potential buyers.
According to Jato Dynamics, Tesla sold less than 16,000 vehicles in the region in February, its lowest market share (9.6%) for the month in five years. This follows an even sharper 45% decline in January, where sales dropped from 18,161 units in 2024 to 9,945 this year.
Musk’s increasingly visible role in Donald Trump’s administration, coupled with his vocal support for Germany’s far-right AfD party and public political stunts—such as brandishing a chainsaw at a conservative conference—have fueled concern that Tesla is facing a growing consumer backlash. Protests targeting Tesla dealerships have also emerged, further complicating the company’s European sales outlook.
Despite Tesla’s struggles elsewhere, the UK market proved to be an exception. The Society of Motor Manufacturers and Traders (SMMT) reported a 21% rise in new Tesla car registrations in February, with the Model 3 and Model Y ranking as the second and third best-selling cars in the country, behind the Mini Cooper. However, Tesla’s recent success in the UK does not necessarily counter the broader trend of declining European sales. Analysts argue that the UK’s EV incentives, fleet sales, and Tesla’s ongoing price cuts may have artificially buoyed demand in the short term.
Competitors Are Gaining Ground
Tesla’s sales slump comes as European and Chinese automakers rapidly gain ground. Volkswagen reported a 180% surge in battery electric vehicle (BEV) sales, reaching nearly 20,000 units in February. BMW and Mini combined to sell 19,000 BEVs, closing in on Tesla’s total, while Polestar recorded an 84% increase, delivering over 2,000 vehicles. BYD, the Chinese EV giant, saw a 94% sales increase in Europe, surpassing the 4,000-vehicle mark for the month.
BYD’s financial strength further underscores its growing dominance in the EV sector. The company reported record-breaking annual revenue of 777 billion yuan ($107 billion) for 2024, a figure that eclipsed Tesla’s $97.7 billion revenue from the previous year. In its earnings report released on Monday, BYD disclosed a net profit surge of 34% year-over-year to just over 40 billion yuan ($5.55 billion). This exceeded analysts’ expectations of $5.44 billion but remained below Tesla’s $7.1 billion net profit for 2024.
BYD now sells nearly as many electric vehicles as Tesla, with 1.76 million units sold last year compared to Tesla’s 1.79 million. When including hybrid sales, BYD is significantly larger, delivering 4.27 million vehicles in 2024—almost matching Ford’s 4.5 million global sales.
Musk’s Politics Hurts Tesla in Europe
Elon Musk’s political affiliations and increasingly divisive public persona are impacting Tesla’s brand perception, particularly in progressive-leaning markets like Germany, France, and Scandinavia. His endorsement of Germany’s far-right AfD party, repeated criticisms of European leaders, and provocative social media posts have alienated a portion of Tesla’s historically liberal customer base.
Some Tesla owners have reportedly sold their cars in protest, while prospective buyers explore alternatives from legacy European automakers or Chinese brands.
However, analysts believe that Tesla’s slump can’t be solely attributed to Musk’s politics. They argue that multiple business factors may be contributing to the decline, including the transition of Tesla’s bestselling Model Y to an updated version, disruptions in government EV incentives in key markets, and rising competition.
Felipe Muñoz, a global analyst at Jato Dynamics, noted that Tesla is experiencing a period of immense change. In addition to Musk’s increasingly active role in politics and the increased competition it is facing within the EV market, the brand is phasing out the existing version of the Model Y before it rolls out the update.
“Tesla is experiencing a period of immense change. In addition to Elon Musk’s increasingly active role in politics and the increased competition it is facing within the EV market, the brand is phasing out the existing version of the Model Y – its bestselling vehicle – before it rolls out the update,” he said.
“Brands like Tesla, which have a relatively limited model lineup, are particularly vulnerable to registration declines when undertaking a model changeover.”
Tesla’s European decline comes amid wider shifts in the global EV market, with Chinese automakers expanding aggressively and legacy carmakers ramping up their electric vehicle production. BYD, which has already surpassed Tesla in global revenue, has set ambitious targets, forecasting between 5 million and 6 million vehicle sales in 2025. Meanwhile, Volkswagen and BMW continue to increase their BEV production, further eroding Tesla’s early-mover advantage.
The total number of BEV registrations across Europe rose by 25% in February, highlighting that while Tesla’s sales are shrinking, the overall EV market continues to grow. This underscores a fundamental shift in consumer preference—one that no longer revolves solely around Tesla.
Tesla remains a dominant force in the global EV market, but its diminishing influence in Europe raises questions about whether it can sustain long-term growth in an increasingly competitive landscape.
While Musk’s political controversies may be alienating some buyers, the company’s challenges in Europe are also tied to market forces beyond his personal brand. With Tesla’s rivals gaining momentum, analysts believe the company will need to rethink its European strategy, whether through price cuts, new models, or an aggressive marketing push to regain lost ground.
