Tesla has seen a significant drop in electric vehicle (EV) sales across Europe, with several factors contributing to the downturn. One of the main reasons behind this decline appears to be CEO Elon Musk’s involvement in politics, which has sparked backlash in some regions. This, combined with fierce competition and economic factors, has led to Tesla’s stock taking a heavy hit, significantly affecting the company’s market value.
Plummeting Sales in Europe
Tesla’s sales in Europe have taken a sharp decline in early 2025. According to the European Automobile Manufacturers’ Association (ACEA), Tesla’s EV sales dropped by a staggering 45% in January, compared to the same month in 2024. This is despite the overall EV market in Europe seeing an increase of 37%. The drop in sales represents a worrying trend for the company, as it is losing its market share in one of its most important regions.
In 2024, Tesla’s car sales in the European Union also fell by 13%. Germany, Tesla’s largest European market, saw the steepest decline, with sales dropping by 41%. In January 2025, Tesla sold only 1,277 cars in Germany, the lowest figure since July 2021. France also experienced a major fall in sales, with Tesla’s vehicle registrations plummeting by 63% to just 1,141 in January—the lowest number since August 2022.
In the UK, Tesla lost ground to its Chinese competitor, BYD, for the first time. This is a significant milestone, as the UK market had traditionally been one of Tesla’s strongholds in Europe. Tesla’s market share in Europe has now fallen to 1% from 1.8%, which is a worrying sign for the company, especially considering that the European market has been growing for EVs in recent years.
Elon Musk’s Political Interventions
Many analysts believe that Tesla’s struggles in Europe are partially due to Musk’s political involvement. Musk has made headlines for his public support of US President Donald Trump and his controversial actions in Europe. On his platform X, Musk endorsed the German far-right party, Alternative for Germany (AfD), claiming that “Only the AfD can save Germany.” His comments were met with criticism, and some believe his political stance has hurt Tesla’s image in Europe, where political polarization is especially sensitive.
Musk has also clashed with political figures in the UK, particularly over the Rotherham child sexual abuse scandal. He has criticized UK Prime Minister Keir Starmer, further fueling tensions. Additionally, Musk’s close relationship with Trump has raised concerns among some in Europe. Trump’s stance on Ukraine, which bypassed European leaders in peace talks, along with his threat of tariffs against the EU, has already caused discomfort in European circles. Musk’s advisory role to Trump, including his position as head of the Department of Government Efficiency, has only added fuel to the fire. Tesla’s image in Europe may have been negatively affected by Musk’s outspoken political views.
Challenges from Competition
Tesla is also facing stiff competition from other electric vehicle manufacturers, particularly from China. BYD, one of China’s leading EV companies, has made significant inroads into the European market. The company’s increasing market share is a direct challenge to Tesla’s dominance in the region. BYD’s aggressive pricing strategies and expanding product offerings are attracting more customers, leaving Tesla struggling to keep pace.
The tech sector’s developments, particularly from China’s DeepSeek, are also affecting Tesla. DeepSeek’s launch of an open-source AI model has captured the attention of investors and tech companies alike. This new technology threatens to pull resources away from US-based companies like Tesla, which had previously been a leader in the self-driving car market. BYD’s recent partnership with DeepSeek to enhance its autonomous driving technology has rattled Tesla’s investors. These concerns have been amplified by Tesla’s declining stock value, which fell by 8.4% on Wednesday, bringing its market value below $1 trillion (€0.95 trillion). In 2025 alone, Tesla’s stock has dropped by 22%, wiping out much of the previous year’s gains.
Pressure from Investors
Tesla’s stock slump and declining sales have put significant pressure on Musk and the company’s management. Investors have been vocal about their dissatisfaction with Tesla’s performance, especially in comparison to other companies in the “Magnificent Seven” tech stocks. While Tesla’s rivals, such as Shell and Equinor, have seen stronger profits, Tesla’s market value has significantly decreased.
The company is also grappling with rising competition from traditional automakers that are ramping up their electric vehicle production. Companies like Volkswagen, BMW, and Ford are increasingly challenging Tesla’s dominance in Europe. While Tesla remains a market leader in electric vehicles, it faces growing difficulties in maintaining that position in the face of expanding competition and a changing economic landscape.
A Shifting EV Market
Tesla’s decline in Europe could be a sign of broader shifts in the global EV market. With governments focusing on renewable energy and carbon reduction, automakers are under increasing pressure to produce environmentally-friendly vehicles. However, the economic slowdown and high inflation are making it harder for consumers to afford EVs, particularly as the initial cost remains high.
Tesla’s ability to adapt to this changing market will determine whether it can reclaim its position as the leader in electric vehicles. Musk’s controversial political statements and the competition from companies like BYD could complicate the company’s efforts to remain at the forefront of the electric vehicle industry.
To read more about Tesla’s challenges and the state of the electric vehicle market in Europe, visit Euro News 24.