Elon Musk’s involvement in politics may have weighed on Tesla’s sales performance in Europe, with its share price sinking the most in the Magnificent Seven stocks this year.
Tesla’s electric vehicle sales sank across Europe in January, suggesting CEO Elon Musk’s political intervention may have turned European buyers away.
The US-based EV maker’s shares tumbled 8.4% on Wednesday, with its market value falling below $1 trillion (€0.95 trillion), erasing most gains from the Trump-led rally. Tesla’s stock is the biggest faller among the Magnificent Seven stocks, down 22% in 2025, and falling 37% after peaking on 17 December last year, heavily weighing on the group’s performance.
Telsa’s EV sales fall in Europe
According to data from the European Automobile Manufacturers’ Association (ACEA), Tesla sold 9,945 cars in Europe in January, down 45% from the same period last year, even as the overall EV sales rose by 37% for the industry. In 2024, Tesla’s car sales fell 13% across the European Union countries, with the largest drop seen in Germany, plummeting 41%. Tesla’s market share in Europe fell to 1% from 1.8%.
Tesla’s registrations plummeted 63% to 1,141 cars in January in France, the fewest since August 2022, according to the French industry association LaPlateforme Automobile. Additionally, monthly sales in Germany fell to 1,277, the lowest since July 2021, according to Bloomberg’s database. For the first time, Tesla last month also sold fewer cars in the UK than its Chinese rival BYD.
Musk’s political controversy
Tesla CEO Elon Musk, a prominent supporter of US President Donald Trump, has been heavily involved in commenting on European political affairs. He has been posting in both public and his X media to back the German far-right party, the Alternative for Germany (AfD), citing that “only the AfD can save Germany”. He congratulated the party’s co-leader Alice Weidel for her party’s performance in the German election on Monday.
Musk has also criticised the UK’s Prime Minister Keir Starmer and other politicians over a child sexual abuse scandal in Rotherham, in the north of England.
Additionally, Musk’s close relationship with Trump may have also inflamed the controversy. The US president initiated Ukraine peace talks with Russia without involving European leaders, alongside his tariff threats to the EU, which caused unhappiness among member countries. Musk is now an adviser to Trump, being employed by the Trump administration to lead the Department of Government Efficiency’s administrator, assisting the US president in cutting thousands of Federal workers. His high-key political stance has potentially impacted Tesla’s sales drop in Europe, although it is unclear to what degree.
Warning demands and growing competition
Weakening demands and intensifying competition have also put a growth hurdle to the world’s leading EV maker since late 2023. High inflation and a stagnated economy weighed on consumer demands in the EV markets in 2023 and 2024. Meanwhile, the Chinese rival BYD has increasingly taken market share from Tesla. In addition, the Chinese tech rally amid DeepSeek’s launch of an open-source AI model has been buoying its stock markets, driving funds away from US tech companies.
Earlier this month, BYD, the largest Chinese electric car brand, announced that it would partner with DeepSeek to develop its autonomous technology. The news unsettled Tesla’s shareholders, triggering a sharp selloff in its stocks. Tesla’s primary concern is its competitiveness in the full self-driving (FSD) market against BYD.
DeepSeek’s artificial intelligence (AI) model is regarded as a pivotal advancement in the US-China tech race. On the same day of BYD’s announcement, Elon Musk was reportedly leading a group of investors to acquire OpenAI, the owner of ChatGPT, which currently holds the most advanced Large Language Model (LLM) for generative AI technology. However, DeepSeek’s R1 AI model has been proven to be as good as the US top models at a fraction of the costs.
