Tesla‘s European sales have plummeted by 45% year-over-year, with vehicle registrations dropping from 18,161 in January 2024 to just 9,945 in January 2025, according to the European Automobile Manufacturers’ Association (ACEA). This sharp decline, reported by The Washington Post in a February 25 article, is attributed to a combination of factors, including CEO Elon Musk‘s controversial public persona and intensifying competition from Chinese automakers like SAIC Motor and BYD.

Sales Figures and Market Trends

The downturn is even more stark within the European Union (EU), where Tesla’s registrations fell by 50%, from 15,130 to 7,517 units over the same period. Despite this slump, the broader electric vehicle (EV) market in Europa is thriving. The ACEA reports that over 160,000 EVs were sold last month, a significant increase from approximately 120,000 the previous month, marking the largest growth by car type in the European auto market. Tesla, once a dominant player in this space, is losing ground as overall EV demand rises.

The Musk Factor

Elon Musk’s increasingly polarizing actions appear to be a significant drag on Tesla’s brand in Europe. His recent political engagement in Alemania, ahead of the país‘s federal election, has drawn particular scrutiny. Musk has used his social media platform X to amplify far-right, anti-immigrant rhetoric and voice support for the Alternative for Germany (AfD) party, even conducting an interview with AfD co-leader Alice Weidel. His comments urging Germans to move past their “past guilt” over Nazi history have further fueled controversy.

This shift has not gone unnoticed by consumers or analysts. David Bailey, a business economics professor at the University of Birmingham and a Tesla owner, told The Washington Post that Musk is now perceived as “toxic” by some buyers. Bailey has observed stickers on Teslas—including his own Modelo S—bearing messages like “I bought this before Elon went mad!” Ian Henry, director of AutoAnalysis in London, warned that Musk’s association with far-right politics could inflict lasting damage on Tesla’s reputation across Europe, a market critical to its global strategy.

Rising Competition

Compounding Tesla’s woes is fierce competition from Chinese automakers making inroads into Europe. SAIC Motor, for instance, sold 22,994 vehicles in the EU, UK, and EFTA last month—more than double Tesla’s 9,945—representing a 37% increase from the previous January. Meanwhile, Tesla’s product lineup is aging, with some buyers delaying purchases in anticipation of a refreshed Modelo Y expected in May. This hesitation, coupled with the growing appeal of competitors like BYD, China‘s largest EV maker, is eroding Tesla’s market share.

Broader Implications

Tesla’s struggles in Europe underscore a pivotal moment for the company. Historically a leader in the EV sector, it now faces the risk of ceding its position in a key market. The brand’s challenges are not reflective of a shrinking EV market—quite the opposite, as Europe’s appetite for electric vehicles continues to grow. Instead, Tesla’s decline points to self-inflicted wounds and a shifting competitive landscape that could reshape its global standing if the trend persists.

Tesla stands at a crossroads as its European sales falter amid a tarnished brand image and mounting competition. To reverse this slide, the company must address consumer backlash tied to Musk’s actions, accelerate updates to its aging lineup, and reclaim its edge in an increasingly crowded EV market. With Europe’s EV sector on an upward trajectory, Tesla’s ability to adapt will determine whether it can regain its footing or continue to lose ground to rivals.

Photo courtesy of BBC / X