Tesla grapples with a 45% sales collapse in Europe, while the electric vehicle market surges. The role of Elon Musk's controversial public image.
Europe is picking up the pace to be ready for 2035, the year when the registration of new internal combustion engine vehicles is set to stop — a ban that could see exceptions, given that Brussels is reportedly considering exemptions to allow the continued sale of plug-in hybrid vehicles. Time will tell. In the meantime, though, the good news is that electric vehicle sales are soaring: January 2025 recorded a 37 per cent increase compared to last year, with over 166,000 new registrations.
The signal is clear: the automotive ecological transition, whatever people may say, continues to move towards the future we have described many times — namely autonomous driving, the true revolution. The real surprise, however, is something else entirely. Leading Europe's electric vehicle boom is not Tesla, but rather Chinese brands such as BYD and Omoda–Jaecoo, which have posted a surge of 52 per cent, bringing their market share to 3.7. Meanwhile, Trump has confirmed the imminent announcement of 25 per cent tariffs on cars, with the risk of a pointless trade war that would harm consumers and the ecological transition alike.
Tesla suffered a 45 per cent year-on-year collapse in January, due to a number of reasons we will examine shortly. The declining popularity of its founder, Elon Musk, is certainly a factor influencing the brand's performance, especially in Europe, alongside fierce Chinese competition offering affordable, quality products. On the other hand, according to the New York Times, Tesla could be awarded a $400 million contract from the US State Department in 2025 for the purchase of armoured vehicles — presumably the controversial electric Cybertruck.
Reading through the January car market data released by the ACEA, the European Automobile Manufacturers' Association, it becomes clear that Tesla is facing an unprecedented crisis in Europe, with sales plummeting by 50.3 per cent in the EU and by 45.2 per cent across the EU-EFTA markets (Iceland, Liechtenstein, Norway and Switzerland) and the United Kingdom. A decline all the more striking precisely because it comes at a moment when electric vehicle sales in Europe have risen by 37 per cent — a figure that alone shows that demand for "zero-emission" vehicles is not the problem and that, on the contrary, the ecological transition in the automotive sector is winning ever more support.
What about Italy? A closer look at registrations by fuel type reveals that petrol-powered cars closed January down 17 per cent, with diesel also in decline (-41.6 compared to January 2024). A positive trend for "electrified" vehicles, which accounted for 53.3 per cent of the January market, with volumes on the rise, while electric and plug-in hybrid vehicles grew by 65.6 per cent during the month, with a market share of 5 and 8.7 per cent respectively (source: Anfia). But let us return to the data on Tesla.
Digging into the figures released by the ACEA, the scale of the "phenomenon" becomes clearer: the company led by Musk sold 9,945 units in the European Union in January 2025, down from 18,161 in January 2024. The decline was particularly severe in Germany, where sales fell by 59.5 per cent to just 1,277 units, and in France, with a drop of 63 per cent to 1,143 units. Far worse figures than those posted by some Chinese electric vehicle manufacturers such as Saic (owner of the MG brand), which — to give you an idea — made 22,994 deliveries in January.
Among the various factors that could explain Tesla's poor performance, many analysts point to a number of recent events involving its founder Elon Musk — from an alleged "Nazi" salute to his outspoken political opinions (including his support for Germany's far-right party), through to his Trump-appointed role of slashing federal agencies and departments in the name of making the American government more efficient. In short, for many observers Elon Musk's public image may have negatively affected the perception of the Tesla brand in Europe.
Then there are more product-related theories, shall we say. Such as the anticipated update to the Tesla Model Y, which is soon to undergo a significant redesign and which may therefore be prompting many customers to wait for the 2025 model. Inventory shortages may also be partly to blame. According to analysis by Bloomberg, the reasons behind such a sharp sales collapse may also be tied to low vehicle availability following a 2024 in which Tesla dominated the sales charts with a very aggressive commercial approach, both in terms of pricing and volume.
The overall picture nonetheless tells of a Europe in which new car registrations have fallen by 2.6 per cent — a figure we could even read as a positive one: fewer cars are being sold, but the share of more efficient ones is growing. Setting Tesla aside, the overall demand for electric vehicles in Europe has, as we have seen, been rising steadily. Still according to ACEA, in January 124,341 electric cars were sold in the EU — 166,065 units if we also include the EFTA countries and the United Kingdom. That translates into a market share of 16.7 per cent, up from 11.9 per cent in January 2024.
Admittedly, a closer look reveals that Europeans actually prefer hybrids over pure electric vehicles, with 34.9 per cent of preferences, followed by petrol models (29.2). Market shares for diesel (8.8 per cent) and plug-in hybrids (7.6) have fallen. But the most significant figure is the sharp decline of petrol and diesel models combined, which in January dropped to 39.4 per cent (compared to 48.7 the previous year).