Tesla’s electric vehicle sales in Europe plummeted in January, suggesting that CEO Elon Musk’s political interventions may be turning off European buyers.
The company’s shares fell 8.4% on Wednesday, dropping its market value below $1 trillion (€0.95 trillion) and erasing much of the gains from the Trump-led market rally.
Tesla’s stock has been the biggest loser among the Magnificent Seven tech stocks this year, down 22% in 2025 and 37% from its peak on December 17. According to the European Automobile Manufacturers’ Association (ACEA), Tesla sold just 9,945 cars in Europe in January—down 45% from the same month last year, despite overall EV sales in the region rising by 37%. In 2024, Tesla’s car sales dropped 13% across the European Union, with Germany seeing a massive 41% decline.
Tesla’s market share in Europe has now fallen to 1% from 1.8%. In France, Tesla’s registrations dropped 63% to 1,141 cars in January, the lowest since August 2022. In Germany, monthly sales dipped to 1,277 vehicles, the lowest since July 2021. For the first time, Tesla sold fewer cars in the UK than its Chinese competitor, BYD.
Compounding these troubles, Tesla is facing rising competition and a tough economic environment. High inflation and stagnating economies have dampened demand for electric vehicles, and Chinese automaker BYD has been aggressively expanding its market share.
At the same time, the Chinese tech sector has gained attention, particularly with the launch of DeepSeek’s open-source AI model. Earlier this month, BYD revealed its partnership with DeepSeek to develop autonomous driving technology, unsettling Tesla investors and sparking a selloff. This partnership presents a growing threat to Tesla’s dominance in the Full Self-Driving (FSD) market.
DeepSeek’s AI model is seen as a significant leap in the U.S.-China tech competition. On the same day of BYD’s announcement, reports surfaced that Musk was leading a group of investors to acquire OpenAI, the company behind the ChatGPT AI model. However, DeepSeek’s R1 AI model has been proven to rival top U.S. AI models at a much lower cost, raising further concerns about Tesla’s ability to maintain its competitive edge.
