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Tesla’s presence in the European electric vehicle (EV) market has taken a significant hit, with new registrations plunging by 49% in the first two months of 2025 compared to the same period last year, according to the European Automobile Manufacturers’ Association (ACEA).
Declining Sales Despite EV Growth
Between January and February, Tesla registered only 19,046 new cars across the European Union (EU), bringing its market share down to a mere 1.1%. This comes at a time when overall EV sales surged by 28.4% across Europe, reaching 255,489 units, with electric vehicles now accounting for 15.2% of the total car market.
Even in February alone, Tesla’s registrations fell by 47%, dropping to 11,743 units, raising concerns about the company’s ability to sustain its dominance in the fast-growing EV industry.
Why Are Tesla Sales Plummeting?
Analysts cite multiple factors behind this steep decline:
✔️ Aging Model Lineup – Tesla’s current vehicle lineup, including the Model 3 and Model Y, is facing stiff competition from newer, more advanced electric models from European automakers.
✔️ Brand Image Controversy – Elon Musk’s public and political controversies, including his vocal support for Donald Trump and recent cost-cutting measures at Tesla, have sparked backlash among potential buyers. Some industry watchers believe this has led to a boycott by environmentally-conscious European consumers.
✔️ Economic Pressures – With inflation and high-interest rates, consumers may be rethinking their EV purchases, especially as European manufacturers offer more competitive pricing and incentives.
Shift Toward Hybrid Vehicles
While Tesla’s numbers dipped, hybrid-electric vehicles (HEVs) emerged as the top choice for European buyers. In the first two months of 2025, hybrid registrations rose to 594,059, capturing a 35.2% market share, surpassing both petrol (29.1%) and diesel (9.7%) models.
Industry Calls for Policy Support
Sigrid de Vries, Director General of ACEA, emphasized that while overall EV demand is growing, it is “still below the level needed for a full transition to zero-emission mobility.” She stressed the need for stronger tax incentives, better subsidies, and expanded charging infrastructure to support the shift away from traditional combustion engines.
What’s Next for Tesla?
Tesla now faces a crucial moment as it prepares to launch new models and price adjustments to regain lost ground. Meanwhile, European automakers such as Volkswagen, BMW, and Renault are capitalizing on Tesla’s struggles by ramping up EV production and incentives, making competition fiercer than ever.
With the EU considering loosening emission reduction targets to support struggling automakers, Tesla’s strategy in the coming months will be critical to determining its position in the European EV market.
