Tesla Inc. (NASDAQ: TSLA) is facing mounting sales struggles in Europe, with new data revealing a 42.6% year-to-date decline in car sales across the continent.
According to the European Automobile Manufacturers Association (ACEA), Tesla sold fewer than 17,000 vehicles in February 2025, compared to 28,000 units in the same month last year—a 42.6% drop. The company’s market share has also fallen to 1.8%, down from 2.8% a year earlier.
Tesla Lags Despite Growing EV Market
While Tesla sales plummeted, the overall European EV market surged by 26.1% year-over-year, highlighting the company’s growing struggle against competitors, particularly from China.
- Despite the broader decline of 3.1% in total new car sales, battery electric vehicle (BEV) adoption continues to rise, making Tesla’s underperformance even more striking.
- BYD, Tesla’s largest Chinese rival, recently overtook the American automaker in global annual revenue, intensifying competitive pressure.
Germany: Tesla’s Biggest Setback
Tesla’s sales troubles were especially severe in Germany, where its February sales fell by more than 70%.
- The sharp decline coincided with the German national election, during which Elon Musk publicly backed the far-right Alternative für Deutschland (AfD) party.
- Musk’s political stance triggered consumer boycotts in Germany, where EV adoption is rising but Tesla’s market share is eroding.
Political Fallout Fuels Backlash
Musk’s alignment with former US President Donald Trump is also denting Tesla’s image.
- Musk, who now leads the Department of Government Efficiency (DOGE) under Trump’s administration, has spearheaded federal job cuts and spending reductions.
- His high-profile Pentagon visit and calls for right-wing support in Germany have sparked violent protests against Tesla interests, with the FBI investigating attacks on its dealerships.
- In the US, Tesla is seeing record levels of trade-ins as some consumers dump their vehicles in protest.
Competition and Model Delays Weigh on Sales
Beyond the political controversy, Tesla is losing ground due to intensifying competition and product delays.
- Chinese competitors like BYD are undercutting Tesla with cheaper, feature-rich models.
- Meanwhile, Tesla’s lack of budget-friendly models and the delayed launch of the mid-size Model Y are limiting its appeal.
Bright Spot: UK Sales
One exception to the sales slump is the UK, where Tesla’s February sales rose by 20% compared to 2024, according to the Society of Motor Manufacturers and Traders (SMMT).
- The UK remains a strong market for Tesla, though overall European weakness continues to weigh heavily on its performance.
Looking Ahead
With falling European sales, boycotts, and rising competition, Tesla’s once-dominant position in the EV market is slipping.
- The company’s reliance on Elon Musk’s controversial public persona is becoming a double-edged sword, as his political affiliations increasingly alienate customers.
- As rivals like BYD ramp up production and introduce lower-cost models, Tesla’s path to regaining market share appears increasingly challenging.
The road ahead for Tesla in Europe looks rough—and its global dominance may be at risk.
