Decline in Tesla's European Sales by 45% observed in January sales data
In a recent report by Bloomberg, Tesla's European sales have experienced a significant decline, with a 45% year-over-year drop in January. This decrease can be attributed to several factors, including the transition to the new Model Y, production changes, and production slowdowns related to "Project Juniper" updates that have resulted in limited inventory.
The new Model Y, which is expected to contribute to Tesla's sales rebound as it becomes widely available, may have temporarily impacted sales in January due to an aggressive end-of-year sales push in December. This could have inflated numbers, leading to a sharp drop in January sales.
The intensifying competition from both legacy automakers and new entrants, particularly from China, is also affecting Tesla's European market position. Competitors such as Volkswagen, Stellantis, and Renault have seen significant growth, while Chinese automaker BYD has surpassed Tesla in sales in Europe by May 2025 through rapid expansion and strong sales increases in individual countries like Spain and Norway.
Tesla's market share in Europe has fallen from 1.8% a year earlier to 1%, and the company registered only 9,945 new vehicles in Europe last month, the lowest volume in two years. Sales in key markets like Germany and France decreased by 60% and 63%, respectively.
Besides the competitive landscape, the political controversy surrounding Tesla CEO Elon Musk may be impacting Tesla's reputation in Europe. Musk's vocal support for far-right political figures in Europe and his public endorsement of the Alternative for Germany (AfD) party in Germany could be contributing factors.
Despite these challenges, Tesla is expected to rebound in the coming months. The new Model Y, once widely available, is expected to boost sales, and the European electric vehicle market as a whole is growing. In fact, the total European electric vehicle market grew by 37% during the same time period.
As Tesla navigates these challenges and continues to innovate, it remains to be seen how the company will fare in the competitive European market. However, with the anticipated arrival of the Model Y and a growing European electric vehicle market, there is hope for a sales rebound for Tesla in the near future.
