London, March 25 – Tesla’s dominance in the European electric vehicle (EV) market is rapidly eroding, with sales plunging 42.6% year-on-year in February, marking the second consecutive month of decline. Despite a surge in overall EV registrations across the continent, Elon Musk’s all-electric brand continues to lose ground, according to data released by the European Automobile Manufacturers Association (ACEA) on Tuesday.
Tesla’s Shrinking Market Presence
Tesla now holds just 1.8% of the total European car market, a sharp decline from 2.8% last year. Its share of the battery-electric vehicle (BEV) market has also taken a severe hit, falling from 21.6% in February 2024 to just 10.3%. In real numbers, Tesla sold fewer than 17,000 cars across the EU, Britain, and European Free Trade Association countries, a steep drop from 28,000 units sold in the same month last year.
Growing Competition and Controversy
Several factors are fueling Tesla’s decline. The aging lineup of Tesla’s current models is struggling to compete with a wave of new, often more affordable electric vehicles from both legacy automakers and Chinese EV brands. Additionally, Elon Musk’s controversial political engagements—including his recent association with far-right groups in Europe—have further dented the brand’s reputation and consumer appeal.
Meanwhile, other automakers are thriving in the European EV market. Volkswagen and Renault saw their sales increase by 4% and 10.8%, respectively, while Stellantis experienced a 16.2% decline. Chinese automaker SAIC Motor defied European tariffs, posting an impressive 26.1% growth, while Geely-owned Volvo saw sales drop 15%.
European EV Market Remains Strong
Despite Tesla’s struggles, the broader European EV market is booming. Overall BEV sales surged 26.1% in February, even as total car sales declined by 3.1%. Hybrid electric vehicle (HEV) sales also climbed 19%, reflecting a continued shift towards electrified mobility.
Chris Heron, Secretary General of E-Mobility Europe, noted that 2025 has started strong for Europe’s electric car market, with automakers ramping up production to meet the EU’s CO2 emission targets. However, new EU regulations could soon relax emission standards, potentially reshaping automakers’ EV strategies.
What’s Next for Tesla?
Tesla’s carbon credit sales, which allow other automakers to offset emissions, remain a key revenue stream. However, if Tesla’s market share continues to decline, its ability to compensate for competitors’ emissions could weaken, further impacting its financial standing.
With the launch of its new Model Y mid-size SUV on the horizon, Tesla faces mounting pressure to reverse its European sales slump. Whether Musk’s company can reclaim lost ground remains an open question, but for now, Europe’s EV market is no longer Tesla’s to dominate.
