S Poddar
Tesla’s European sales plummeted by nearly 45% in February, providing a good sign that Elon Musk’s provocative conduct is starting to have an effect on consumers. The fall comes as part of a sustained trend, which implies that the flamboyant CEO’s political connections and public gestures are repelling some potential customers from the company.
In February, the Texas-based auto maker sold under 16,000 vehicles in Europe, which encompasses the EU, UK, Norway, and Switzerland. This is a mind-boggling 44% decline in sales across 25 nations compared to the same month last year, based on Jato Dynamics data, a research platform. Tesla’s share of the market also plummeted, dropping to 9.6%, the lowest since February four years ago. The company’s woes were already apparent in January when sales declined by 45%, from 18,161 units in 2024 to 9,945.
But not all markets declined. In the UK, Tesla experienced a near 21% increase in new car registrations in February. The Model 3 and Model Y were especially popular, being the second and third most purchased electric vehicles after the Mini Cooper, respectively. But even with this regional success, analysts are now looking more closely at how Elon Musk’s public image, particularly his relationships with the Trump administration, may be influencing consumer behavior.
Since becoming a key figure in Donald Trump’s administration, Musk has made many political assertions and alignments that have caused controversy. His endorsement of Germany’s far-right party AfD, his show of a “chainsaw of democracy” at a conservative convention, and his claims of political cover-ups have all caused a stir. These events could play a part in discouraging some customers from backing Tesla, either because of political disagreements or issues regarding Musk’s leadership.
In addition, Tesla dealerships have seen more frequent protests, and some groups have complained about Musk’s political involvement. While such protests might be indicative of deeper political disaffection, they are also reflective of the trouble Tesla is having with its European customer base.
Other factors that may impact Tesla’s performance include:. Felipe Muñoz, a Jato Dynamics global analyst, noted that the company is currently undergoing a period of major change. Beyond Musk’s more outspoken political presence, Tesla is also facing increased competition in the electric vehicle (EV) space. Additionally, the company is in the process of an update to its top-selling Model Y, which may account for some of the recent sales downturns. “Tesla is going through a time of tremendous change.
In addition to Elon Musk’s more prominent involvement in politics and the greater competition it is seeing within the EV category, the company is sunsetting the current iteration of the Model Y – its top-selling model – before introducing the update,” Muñoz explained. The analyst further contributed that “Models like Tesla with relatively small model lineups are especially susceptible to registration drops when going through a model transition. While Tesla struggles to meet these concerns, its peers are making some serious gains. Volkswagen, for example, tallied a sensational 180% spike in the sale of battery electric vehicles (BEVs), coming in just shy of 20,000 units in February. BMW and Mini had likewise strong figures with 19,000 BEVs combined sold within the same timeframe.
More notably, perhaps, the Chinese electric vehicle manufacturer BYD has made significant strides in Europe. With a 94% increase in sales, the firm sold more than 4,000 electric cars in February alone. This success has helped propel BYD to become the world’s largest electric vehicle firm by revenue, with annual profits reaching more than $100 billion in 2024.
Unlike Tesla’s woes, BYD has had a meteoric rise. The company, which produces hybrid cars as well, has watched its worldwide sales skyrocket. In 2024, BYD sold 1.76 million electric vehicles, barely behind Tesla’s 1.79 million units. Adding their hybrids into the mix, BYD’s total car sales far surpass Tesla’s.
BYD’s 2024 revenue reached 777 billion yuan ($86 billion), up 29% year-on-year, beating expectations from analysts.
Tesla’s revenue for the same period was $97.7 billion. BYD’s achievement is not only limited to Europe; BYD’s growth is worldwide. BYD has positioned itself as a strong competitor in the electric car market with its goal of selling 5 million to 6 million vehicles in 2025. The firm is now worth approximately $160 billion, a 50% jump this year, while Tesla’s value is $780 billion, even after a sharp decline in share prices in 2025. Polestar, a rival, has also posted huge growth with an 84% increase in sales to more than 2,000 units in February. Polestar, owned by part by Volvo group parent Geely, has further established the increasing competition in the electric car segment.
The wider car market is also changing. Total car sales in the 25 European Union countries, including Switzerland and Norway, fell 3% to 970,000 in February. But BEV registrations rose a quarter, which mirrors the increased popularity of electric cars as a whole.
While these headwinds confront Tesla, it’s apparent that the company’s future in Europe will rest on whether it can successfully navigate internal shifts and outside competition. It may be whether to cope with the fallout from Musk’s political profile or handle the evolving tastes of European automobile consumers, but Tesla’s position in the marketplace is under intense scrutiny as competitors such as BYD and Volkswagen move up.
