Tesla's EU sales have plummeted continuously: a market winter under the pressure of multiple factors

Recently, Tesla's sales in the EU market have fallen sharply for the third consecutive month, attracting global attention. According to data from the European Automobile Manufacturers Association (ACEA), Tesla's new car registrations in March plummeted 36% year-on-year to 18,224 units, while the overall EU pure electric vehicle market grew by 17% during the same period. This contrast reflects that Tesla is facing unprecedented challenges.

Since the beginning of 2025, Tesla's decline in the EU has become more and more obvious. Sales in January were halved by 45%, fell by 47% in February, and continued to fall by 36% in March, forming a "three-consecutive decline" trend. At the specific country level, the French market registered a 63% year-on-year drop in January, the UK fell by 18%, Germany fell by 59.5%, and Norway, Sweden, the Netherlands and other countries all fell by more than 30%. In sharp contrast, traditional car companies such as Volkswagen and Renault achieved double-digit growth during the same period, and Chinese brands such as BYD and SAIC achieved a breakthrough against the trend in the EU market. BYD even surpassed Tesla in sales in the UK for the first time.

Tesla CEO Elon Musk frequently makes political remarks on social media, especially his support for far-right forces, which has aroused strong resentment among the European public. The Berlin factory in Germany has been repeatedly protested due to environmental disputes, and the Dutch showroom has been sprayed with Nazi symbols by extremists, which has seriously damaged the brand image in the value-oriented European market.

Tesla's main models Model 3/Y have not launched disruptive upgrades since 2020, and the aging design and slow configuration updates have been criticized by consumers. On the other hand, competitors, Volkswagen ID series continues to iterate, Mercedes-Benz EQ family accelerates layout, and Chinese brands seize the market with cost-effectiveness and intelligent technology.

The capacity utilization rate of the Berlin factory is less than 60%, and the Model Y replacement window period has led to inventory backlogs, and dealer traffic has dropped by 30%. At the same time, the barriers to charging networks in Europe have been broken, and the joint charging alliance of multiple car companies has weakened Tesla's ecological advantages.

The EU has tightened its subsidy policy for electric vehicles, coupled with the weak economic recovery, consumers are more inclined to choose cost-effective models. Tesla's high-end positioning and high pricing strategy have been cold in the trend of consumer downgrade, and its market share has shrunk from 1.8% in 2024 to 1%.

Tesla's predicament is essentially the pain of the transformation from "technological leadership dividend" to "comprehensive competitiveness". In the EU market, its autonomous driving technology lags behind local car companies because it does not use LiDAR. Musk's distraction from AI business has led to the distraction of management's attention. The evaporation of market value of 186 billion US dollars further highlights the crisis of market confidence. At the same time, Chinese brands are seizing the market through localized R&D, supply chain layout and policy compliance. BYD received a subsidy of 1.5 billion euros from Germany, and SAIC announced the construction of a new third factory. The era of Tesla's "monopoly" has ended.

Faced with a decline in sales, Tesla needs to accelerate the pace of product updates, launch new models such as Cybertruck as soon as possible, and optimize the production efficiency of the Berlin factory. At the level of brand image repair, downplay Musk's personal controversy and political connections, and strengthen the corporate social responsibility narrative. In addition, in response to the preferences of the EU market, launch more cost-effective compact electric vehicles and deepen cooperation with local charging networks. Only by getting rid of the path dependence of "single point breakthrough" and building all-round competitiveness in technology, products, brands, and ecology can Tesla regain the initiative in the European market.

Tesla is currently in its "darkest hour", but its technological accumulation and brand appeal are still there. If it can achieve breakthroughs in product strength and strategic adjustments, it still has a chance to reverse the downward trend. This market winter may become an important turning point in its global strategy.