Tesla Inc. experienced a dramatic 45% drop in sales across Europe last month, even as the overall electric-vehicle (EV) market saw a surge in demand, Bloomberg reports, citing data released by the European Automobile Manufacturers’ Association.
The Elon Musk-led company registered just 9,945 cars in January, a significant decrease from 18,161 in the same period last year. Meanwhile, EV sales for the broader industry soared by 37%, with major gains reported by rival carmakers in key markets like Germany and the UK.
Several factors are likely contributing to Tesla’s underperformance. The company is currently transitioning production lines for the Model Y SUV, its best-selling vehicle, and may be facing inventory shortages as a result.
The sales figures reflect this potential backlash. Tesla registered only 1,277 new cars in Germany last month, its lowest monthly total since July 2021. Sales in France plummeted by 63%, marking its worst performance since August 2022.
In the UK, Tesla sold fewer vehicles than Chinese EV manufacturer BYD Co. for the first time ever. Tesla’s sales in the UK slumped almost 8%, even as the overall EV market grew by 42%.
Tesla acknowledged during its recent quarterly earnings call that the transition to a new Model Y design would result in several weeks of lost production.
Meanwhile, competition from European automakers such as Volkswagen AG, Stellantis NV, and Renault SA is intensifying, driven by stricter regulatory pressures to increase EV sales. Manufacturers must meet stricter CO2 emissions targets in the European Union this year, and a steadily rising share of their sales need to be zero-emission in the UK through 2035.
