Market Analysis

European EV Market Shake-Up: Tesla Sales Tumble in January

Amos Simanungkalit · 05 Feb47.9K Views

Image Credit: Yahoo!Finance

Tesla saw a decline in sales across five European countries in January, including the UK and France, as newer competitors gained ground in the electric vehicle market. This comes amid growing public dissatisfaction with CEO Elon Musk, whose involvement in politics and support for far-right parties has been controversial. Musk’s $250 million backing of Donald Trump's successful 2024 campaign and his vocal support of far-right parties in the UK and Germany have stirred criticism, particularly on his social media platform X.

Tesla’s sales in the UK dropped nearly 12% in January, while overall EV registrations in Europe hit a record high. Tesla also saw a 63% drop in sales in France, a 44% fall in Sweden, a 38% decline in Norway, and a 42% drop in the Netherlands. In California, Tesla's largest market in the U.S., the company experienced a 12% drop in sales as well.

Tesla faced its first-ever annual decline in deliveries in 2024 but still remains the leading EV seller in the U.S. Musk has promised cheaper EV models by 2025 and is placing more focus on autonomous driving technologies. However, the company has not responded to requests for comment on the sales decline.

In the UK, Tesla dropped from second to seventh place in EV sales in January, falling behind competitors like Volkswagen, Mercedes, and Peugeot. A survey by Electrifying.com revealed that 59% of British EV owners or potential buyers said Musk's influence would discourage them from buying a Tesla, with many consumers looking elsewhere due to fierce competition.

Musk’s controversial political views, including his support for the far-right Alternative for Germany (AfD) party, have drawn backlash from European politicians and some social media users, leading to some accounts quitting his platform X. Despite this, Tesla’s stock has continued to perform well, more than doubling in value over the past year, and currently trades with a forward P/E ratio exceeding 131, surpassing both traditional carmakers and tech stocks with much lower ratios.

Ben Nelmes, CEO of New AutoMotive, believes that Tesla's sales decline is more due to a lack of innovation since the Model Y's launch in 2020 than Musk’s political views. While Tesla faces increasing pressure from rivals, especially Chinese EV makers, its stock remains strong.