Tesla Sales Plummet In Europe & California

Tesla stock continues to trade at about a bazillion times earnings, but there are warning signs flashing for those who are thinking about what lies ahead for the company. Bloomberg Hyperdrive reports that Tesla sales plummeted 63 percent in January 2025 in France, the European Union’s second largest market for battery electric vehicles. As we reported recently, 19,924 battery electric cars were sold in France last month — more then 21 percent of all new car sales — but only 1,141 were Teslas, the lowest monthly total since August of 2022 according to data from La Plateforme Automobile.

Bloomberg notes that Elon Musk has inserted himself in European politics to an unprecedented degree in recent months, throwing his support behind the far-right Alternative for Germany (AfD) party and taking on UK Prime Minister Keir Starmer and his Labour government. It’s unclear to what degree that’s starting to take a toll on demand for Tesla cars in the region, Bloomberg says, because there is no empirical data from which to draw any conclusions. But you don’t need a weatherman to know which way the wind blows, and anyone who cares to can draw a bright line from Musk’s behavior to the decline of Tesla sales in France.

Tesla registrations in European countries fell 13 percent last year, with Germany — the largest new car market in Europe — accounting for much of the decline. Tesla has struggled in that country due to an aging model lineup, increasing competition, and the withdrawal of government subsidies in late 2023. Tesla sales plunged 41 percent last year in Germany, while overall battery-electric vehicle sales declined 27% in the country. The Federal Motor Transport Authority is scheduled to report January results on Wednesday, February 5. Rival automakers are counting on Tesla for help complying with increasingly stringent emissions standards this year. It will pool its sale this year with at least five other manufacturers, including Toyota, Stellantis, and Ford.

French government ministers late last month called for the European Commission to immediately suspend the regulation on CO2 emissions from passenger cars, warning that it could result in billions of euros going to Chinese manufacturers and Tesla, “whose CEO Elon Musk is openly attacking European regulations and values.” The ministers said implementing the regulations “would be a political error that would damage the credibility of our Union and its industrial strategy. A rigid stance would result in billions transferred to Chinese manufacturers, some of whom have conquered their European market share through unfair trade practices, or to Tesla, whose CEO Elon Musk is openly attacking European regulations and values,” the three leaders said.

European automakers have long complained that the 2025 emissions targets could cost billions of euros to comply with in the midst of slowing sales growth for electric vehicles. Last week, Volkswagen Group estimated the EU emissions standards would cost the company €1.5 billion ($1.6 billion) this year. Renault also has warned it may need to pay fines or compensate an EV maker to meet the targets. The French government has called for a “massive” regulatory pause, starting with ESG rules, and reducing the scope of an EU regulation that requires companies to provide transparency on their environmental impact.

The three ministers called the emissions rules a “sword of Damocles” hanging over an industry that employs nearly 3.5 million Europeans. They praise EU Commission President Ursula von der Leyen for opening a dialogue on the future of the auto industry, but say the fines must first be suspended and suggest European carmakers should be allowed to reach the proposed targets over a three to five year period, which would delay their implementation until approximately 2030. Readers will note that in the US, regulators in the Biden administration did relax the time to comply with tougher exhaust emissions rules until 2032.

Tesla Sales Decline In California

Tesla does not release sales data by country or region, but states do track the number of registrations by manufacturer. According to the California New Car Dealers Association, fewer Tesla automobiles were registered in the Golden State than last year in all four quarters of 2024, Sales of its second most important car, the Model 3 sedan, were down 36 percent for the year. In the US as a whole, sales fell almost 8 percent in the fourth quarter and 12 percent for the year, according to Bloomberg and Experian Automotive. Combined, Model Y and Model 3 sales declined by more than 50,000 units in the US in 2024, according to a CleanTechnica EV sales report. Also see these CleanTechnica reports for more details:

• Tesla, Ford, & Chevrolet Lead US EV Sales — Charts
• USA EV Sales In 2024 — Up 7% Over 2023, 61% Over 2022, 166% Over 2021

Tesla’s registrations declined despite the addition of the Cybertruck to its lineup last year, a vehicle Bloomberg describes as “polarizing.” While more common business factors also came into play, including changing over the Model 3 sedan early in the year, the company likely lost some business in California as a result of the active role Musk played in the US election process, during which he contributed nearly $300 million of his own money, thanks to the Supine Court’s disastrous Citizens United decision. Despite all of that money, Californians gave Kamala Harris a more than 20 percent advantage on Election Day.

Tesla cars have also suffered a reputation hit among some US consumers recently. Survey scores measuring the trust and likability sentiment surrounding the company touched their lowest level since at least 2023 in November and January, according to data provided by Caliber, a brand reputation analytics firm. Tesla did manage to sell the most zero commissions vehicles in California last year, but its market share fell to 52.5 percent compared to 60.1 percent in 2023. Honda and Hyundai were the biggest gainers in the EV segment, adding 1.8 and 1.5 percentage points of market share respectively.

Musk has long disparaged the state of California after a health official in Fremont ordered the company to observe state-mandated protocols related to the COVID-19 pandemic. Musk believes such regulations are an impermissible restriction on corporations. Like a reactive 8 year old who threatens to hold his breath until his face turns blue if he doesn’t get his way, he uprooted the Tesla and SpaceX headquarters in California and moved them to Texas. Oddly enough, despite his fit of pique, Tesla still cannot sell its cars in Texas, which seems somewhat strange considering how much love he has given the Lone Star State. Apparently, the Texas new car dealers are more powerful than Musk, if you can imagine such a thing.

The takeaway from all this is that the Great and Powerful Musk appears to have lost all interest in the car business. His mind is on to other things — AI, digital currency, brain implants, and burning down governments around the world. What that means for the market value of Tesla is anyone’s guess, but an inattentive leader hardly seems like a recipe for boosting the share price of a company. Elon is an expert at defying logic when it comes to the price of Tesla shares. It will be interesting to see if he can keep working his magic if more people start to notice that some of the air in the Tesla hot air balloon is beginning to escape.