Electric vehicle (EV) adoption in Europe is increasing. One would expect that Tesla would be one of the biggest winners of such news.
But the company’s sales are falling across most of its key markets.
The latest figures from Norway, Germany, France, Sweden, and Denmark paint a clear picture: consumers are turning their backs on Tesla in favour of European, Japanese, and even Chinese competitors.
The company that once dominated EV markets is struggling to maintain its position.
This is a situation that not only worries the company’s shareholders, but it also highlights some key insights about the economy and the trajectory of global EV adoption.
The data tells the story
The European EV market is expanding, with battery electric vehicles (BEVs) accounting for 15% of total EU car sales in January 2025, up from 10.9% in January 2024.
BEV sales surged by 34%, with strong growth in Germany, Belgium, and the Netherlands.
Hybrid-electric vehicles now make up 34.9% of new car sales in the EU, making them the most popular choice among buyers.
Plug-in hybrid EVs (PHEVs), however, are in decline, down 8.5% in January, as consumers move toward full electrification.
In Norway, where EVs accounted for 96% of all new passenger car sales in early 2025, Tesla’s sales dropped by nearly half.
The company sold just 1,606 units in January and February, down from 2,887 during the same period in 2024.
Meanwhile, Volkswagen saw a 224.1% increase in sales, Toyota surged by 97.6%, and Nissan grew by 31.3%.
The best-selling EV in Norway was no longer a Tesla but the Toyota bZ4X, followed by the Volkswagen ID.4.
Tesla’s top-selling Model Y saw a staggering 64.4% decline.
Germany, the EU’s largest car market, saw overall BEV sales grow by 53.5% in January.
However, Tesla’s presence has weakened as German automakers ramp up production.
Volkswagen, BMW, and Mercedes-Benz are all gaining ground, particularly as Tesla struggles with the impact of Germany’s subsidy cuts in 2024.
In France, Tesla’s year-to-date sales are down 44%.
The Model Y, which was the country’s best-selling EV in 2024, has fallen to 27th place in 2025, trailing behind the Peugeot 208, Renault 5, and Citroën e-C3.
Meanwhile, overall EV sales in France have remained stable, with domestic automakers benefiting from government incentives.
Sweden and Denmark also show a similar pattern.
Sweden’s BEV market share rose to 31.9% in February, but Tesla sales dropped 42%, with the Model Y down 52.1%.
In Denmark, EVs accounted for 65% of all new cars sold in February, a 72% year-on-year increase, but Tesla’s sales fell by 48%.
These figures make it clear: the European EV market is expanding, but Tesla is heading towards the opposite direction.
What’s really driving Tesla’s decline?
Tesla’s struggles in Europe are not just about numbers. The company is facing multiple challenges that are making it harder to compete.
First, there is more competition than ever. Volkswagen, BMW, Peugeot, Renault, and Toyota are all producing high-quality, affordable EVs that directly compete with Tesla’s lineup.
Many of these models are priced lower, making them attractive to buyers who once defaulted to Tesla.
Government incentives also play a role.
France, for example, has structured its subsidies to favour domestic automakers, making Tesla a less attractive option.
Germany’s abrupt subsidy cuts in 2024 hurt EV demand in general, but Tesla was particularly affected as many buyers had relied on these incentives to make Tesla’s higher-priced models more affordable.
Consumer perception is another major factor.
A recent survey in Norway found that 67% of consumers now have a more negative view of Tesla than before, largely due to Elon Musk’s political beliefs.
While Tesla’s early buyers were attracted to the brand’s innovation and exclusivity, that appeal is fading.
Tesla is no longer a niche brand. It is just another carmaker in a crowded field, and competitors are catching up. Brand fatigue is a real thing.
The brand’s reputation has also taken a hit due to service and reliability concerns.
Tesla ranks poorly in Norway’s Consumer Council and NAF reports, with frequent complaints about customer service and repair times.
Many buyers who once saw Tesla as the best option for an EV now have alternatives that offer better support.
Musk’s growing political controversies are also playing a role. His support for right-wing figures such as Germany’s AfD party and his influence through U.S.
President Donald Trump is alienating European buyers.
Unlike in the US, where Musk’s political influence might not affect Tesla’s market, European consumers are showing signs of disengagement from the brand.
Protests at Tesla dealerships in multiple countries suggest that public perception of the company is deteriorating, and quickly.
Can Tesla recover in Europe?
The company is certainly going to try its best to regain Europe’s trust. Tesla is set to release an updated Model Y, known as “Juniper,” in March 2025.
Historically, March has been a strong sales month for Tesla, and the company is hoping that the refreshed model will help reverse its decline.
However, it remains uncertain whether a facelift alone will be enough to turn things around.
Tesla also stands to benefit from new EU policies.
The European Commission is set to introduce an automotive action plan that includes incentives for electrifying company fleets and new funding for battery manufacturing in Europe.
If Tesla can align with these incentives, it may regain some lost ground.
However, the company still faces major challenges.
Competition will only increase, and European automakers are aggressively expanding their EV lineups. Tesla’s biggest problem is no longer supply; it’s demand.
The European market is changing, and Tesla is no longer the only compelling option.
If Tesla wants to recover, it will need to do more than release updated models. It needs to lower prices, improve service quality, and repair its brand image in Europe.
Otherwise, the decline seen in early 2025 may only be the beginning of a longer-term trend.
History shows that once a brand’s image gets tarnished, it’s incredibly difficult to rebuild.
The fact that Europeans are now embracing EVs while disassociating from the Tesla brand is enough proof that the company has a mountain to climb.
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