It wasn’t so long ago that Telsa was cruising along the fast lane of the global freeway. More recently, though, it seems like its controversial CEO Elon Musk is intent on driving his company into a brick wall.
The latest update from the European Automobile Manufacturers Association confirms a trend that has been frightening Tesla’s investors. Sales across Europe – including the EU, the UK and the members of the European Free Trade Association – plunged by 40 per cent in February 2025 versus last year, and the company’s market share declined from 2.8 per cent to 1.8 per cent. It looks even worse when you consider that sales of battery-powered vehicles overall jumped by more than a quarter (26.1 per cent).
This is a trend that is picking up speed. Tesla shifted 327,000 units in Europe in 2024, an 11 per cent decline on 2025. Europe is not as important a market as the US, which accounted for 655,000 sales, or China, where Tesla sold 603,000 vehicles out of a total of 1.79 million. But it still accounts for roughly one in every five Teslas leaving the gigafactory. It also played an important role in the global decline in sales from the record 1.81 million recorded in 2023.
And the Euro-rot may be spreading. Data from S&P Global recorded an 11 per cent decline in the US in January. Rubbing salt into the wound were figures from BYD, the Chinese electric vehicle maker. Its revenues jumped by 29 per cent to 777bn yuan ($107bn, £83bn), zipping past Tesla’s $97.7bn.
Competition from rivals, whose EVs are advancing apace in terms of quality and range and are often cheaper than Tesla to boot, is one of the factors behind the group’s struggles, irrespective of the behaviour of its high-profile chief executive. The five-year-old Model Y has also been in need of an upgrade, which it is getting. But will that do the trick?
“It packs more electric range, a dramatically improved interior and some clever new tech features that the rest of the pack isn’t even trying yet,” said InsideEVs. “Purely on its own merits, it deserves to keep its (market leading) crown – but whether it can is an open question.”
That “open question” is in no small part the creation of Musk. Teslas are no longer the Audis of the EV world – the shiny status symbol on the eco-committed motorist’s driveway. There have even been reports of their being vandalised.
The damage to the brand done by Musk’s embrace of Maga and his quixotic antics is starting to be recognised on Wall Street – something that would make more conventional CEOs sit up and take note. The shares have rallied a bit in recent days, but they have been hammered since the beginning of the year, losing 28 per cent of their value. Tesla’s market value has dipped below the $1 trillion mark as a result.
Is there anything the board can do to rescue the situation? The better question is whether there is anything this board will do. Recall that Delaware judge Kathleen McCormick struck down Musk’s multibillion-dollar pay package (the dollar amount varies depending on the share price but is still the highest in human history) in part because of the pliancy of his fellow directors.
McCormick found that the company, its CEO and his fellow board members had failed to inform Tesla investors that Musk had been allowed to dictate the terms of his package. She ruled that it was the product of a “deeply flawed” process despite it securing the backing of a supermajority of shareholders.
Do any of Musk’s fellow directors have the gumption to say something like: “Don’t you think that chainsaw stunt and the other stuff is, well, a bit much?”
I rather doubt it.
That infamous incident occurred at the Conservative Political Action Conference (CPAC), during which Musk was posturing about what the controversial Department of Government Efficiency (Doge), which he heads up, was going to do to America’s federal bureaucracy.
Antics like that (plus his conspiratorial tweets… plus his public feuding with enemies… oh, and his fondness for far-right political figures) are bound to have an impact given his profile and close association with the Tesla brand. Ditto his cheerleading for the equally divisive President Donald Trump. The latter’s purchase of a Tesla, ostensibly as a gesture of support, probably isn’t going to help much.
Tesla fans would doubtless point out that the shares have wobbled before, notably during the no less controversial acquisition of Twitter, now X, during which time Musk was selling stock. The rot was stopped when he promised to cease offloading it – a promise he kept.
Tesla has proved able to shrug off Musk’s polarising personality during its relentless rise. The shares also seem to have found a floor and its sales aren’t getting kicked everywhere. In Britain, for example, they were up by a fifth in February, rebounding from a decline in January. Fleet managers here are much more interested in financial terms and what the vehicles offer than in Musk’s politics.
Optimists also point to the fact that Musk is due to leave Doge next year, at which point coverage of him will likely drift back towards the business pages. It may happen sooner. Donald Trump is a fickle friend – just ask (former vice-president) Mike Pence.
But there is little doubt that the Tesla brand has taken a beating. This time it really does feel different.
