Tesla Sales Plummet in Europe Amidst Musk Backlash

Sales data indicate a potential shift in consumer sentiment towards Tesla vehicles in Europe, with many buyers seemingly distancing themselves from the brand amidst controversies surrounding Elon Musk's political affiliations and actions.

A sharp decline in Tesla's new vehicle sales across the continent has emerged, plummeting by nearly 45% year-on-year in January. According to data compiled by the European Automobile Manufacturers' Association (ACEA), Tesla sold just under 9,950 vehicles in Europe during January compared to over 18,100 new vehicles sold in the same month of the previous year.

Impact on Tesla's Share Price and Market Valuation

This significant drop in sales has reverberated through Tesla's financial performance, impacting its share price and market capitalization. Following Mr. Trump's election victory, Tesla's share price had surged nearly doubled in the first month, reaching a record high. However, most of these gains have since been eroded, and Tesla's market cap has fallen below the $1 trillion mark.

Despite the recent decline, Tesla's stock, trading at roughly $305 in the U.S. as of early Wednesday, remains up by 54% over the last 12 months. This upward trend is attributed to the company's ambitious plans for self-driving cars and humanoid robots.

Regional Sales Declines

The sales decline extends across various European markets:

• Germany: Tesla sales plummeted by nearly 60% in January year-on-year, potentially reflecting consumer dissatisfaction with Musk's alleged interference in the country's federal elections.
• France: Sales fell by 63% in January, following Musk's support for far-right parties and criticism of left-leaning ones. However, quantifying the impact of his political activities on Tesla's financial performance remains challenging.
• United Kingdom: While sales declined by a comparatively milder 12% year-on-year in January, public anger towards Musk has been evident, with activist group "Everybody Hates Elon" pasting over bus stop ads featuring a controversial image of Musk.

Global Sales Trends and Competition

Tesla's sales decline in Europe coincides with a broader trend of slowing growth in the electric vehicle market. While global EV sales rose by 7.3%, Tesla experienced its first annual sales decline in 12 years, with a 1% drop in 2024 compared to the previous year.

This downturn can be attributed to increasing competition from other EV makers, particularly those based in China and within Europe itself. ACEA data show that overall electric vehicle sales surged by 34% in January, indicating a shift in consumer preferences towards alternative brands.