Tesla Sees A Slump In Sales In Europe As Challenges Mount For EV Maker

According to the European Automobile Manufacturers Association (ACEA), the company sold 42.6 per cent fewer vehicles in the region in the year so far compared to the same period a year ago.

While Tesla struggled, BEV sales across the same markets surged by 26.1 per cent compared to February 2024, even as total car sales declined by 3.1 per cent, ACEA reported.

Source : Archello

Tesla's hold on the European market weakened further in February, as new data indicated a year-on-year decline in market share. Despite an overall increase in electric vehicle (EV) registrations, Tesla's sales dropped for the second month in a row.

According to the European Automobile Manufacturers Association (ACEA), the company sold 42.6 per cent fewer vehicles in the region in the year so far compared to the same period a year ago. The decline came ahead of the highly anticipated launch of the new Model Y mid-size SUV, reported Reuters.

In February, Tesla accounted for only 1.8 per cent of the total car market and 10.3 per cent of the battery-electric vehicle (BEV) segment, a sharp drop from 2.8 per cent and 21.6 per cent, respectively, recorded a year earlier.

The automaker sold fewer than 17,000 vehicles across the European Union, Britain, and European Free Trade Association countries, down from over 28,000 units sold in February 2024.

Challenges Mount for Tesla Amid Growing Competition

The decline in Tesla's European sales comes as competition intensifies. Established automakers and new entrants from China continue to introduce affordable electric models, challenging Tesla's smaller and ageing lineup. Additionally, CEO Elon Musk's engagement with far-right political groups in Europe has sparked controversy, potentially influencing the brand's sales performance.

While Tesla struggled, BEV sales across the same markets surged by 26.1 per cent compared to February 2024, even as total car sales declined by 3.1 per cent, ACEA reported.

Meanwhile, a recent European Union filing revealed that Tesla had entered into a carbon credit pool with multiple automakers to help them meet the revised CO2 emission regulations, which came into effect in January.

Analysts believe Tesla's current sales volumes could still offset emissions for these companies, but a continued decline could alter that balance.

Despite the drop in overall car sales, BEVs continued to gain traction, with sales rising by 23.7 per cent in February. Hybrid electric vehicle (HEV) sales also increased by 19 per cent during the period under review, bringing total electrified vehicle registrations—BEV, HEV, and plug-in hybrid (PHEV)—to 58.4 per cent of the European market, up from 48.2 per cent the previous year.

How Other Automakers Fared?

Among Europe's leading automakers, Volkswagen and Renault reported sales increases of 4 per cent and 10.8 per cent, respectively, while Stellantis experienced a 16.2 per cent decline. China's SAIC Motor recorded a 26.1 per cent increase in sales, despite facing EU tariffs on Chinese-made EVs. Geely-owned Volvo, however, reported a 15 per cent drop. Chinese brands, including BYD, saw their market share rise from 1.5 per cent to 2.5 per cent over the year.

Spain stood out as the only major European market with an increase in total car sales, reporting an 11 per cent year-on-year rise. Other key markets faced declines, with Germany, Italy, and France registering drops of 6.4 per cent, 6.2 per cent, and 0.7 per cent, respectively.