The data published by the European Association of Automotive Manufacturers show that Tesla registrations in January stood at 8,075 units, which represents a decline of 17% compared to the same month of the previous year.
The The group’s market share in the European Union, United Kingdom, Switzerland, Norway and Iceland fell to 0.8%, compared to 1% registered a year before. This is a start to the year that consolidates the weakness observed throughout the previous year.
Tesla’s brand image in tatters
The negative evolution is not explained solely by current factors. The company is experiencing a deterioration in its public perception in Europe, aggravated by the political exposure of its CEO and his close ties with the US administration after Donald Trump’s return to the White House.
During Musk’s period of greatest political involvement, protests occurred at Tesla dealerships in different European countries, which fueled reputational erosion in one of its key markets.
Rico Luman, senior transportation and logistics economist at ING bank, stressed that the beginning of the year is “very weak«, in statements to CNBC. He added that «Tesla’s image deteriorated in Europe last year and people now have many more options with new affordable electric vehicles entering the market, including those from BYD and others such as MG and ZEEKR, while Tesla lacks new models”, in statements to CNBC.
The lack of renewal of the range also weighs on the analysis. While other manufacturers have expanded their offering with more affordable models, Tesla has maintained a strategy focused on its current catalog, with limited adjustments..
Added to this is the increase in first-generation vehicles that return to the market after leasing contracts of between four and six yearswhich has increased the second-hand supply and put pressure on prices.
Chinese competition in full expansion
Faced with Tesla’s slowdown, BYD continues its rapid expansion in Europe. In January, Registrations of the Chinese group reached 18,242 unitswhich represents a year-on-year increase in 165%. Its market share rose to 1.9%, more than double that of a year before.
BYD’s growth occurs despite tariffs that limit its access to the US market, where Chinese electric vehicles face 100% tariffs.
In Europe, however, penetration is advancing strongly thanks to a combination of competitive prices, rapid commercial expansion and an increasingly diversified range.
Michael Field, chief equity strategist at Morningstar, explained that one of the main challenges for Tesla and European manufacturers lies in the structural advantage of Chinese competitors. “The big question now is whether this trend will continue. The answer, unfortunately for European manufacturers and Tesla, is yes«, he stated in statements to CNBC. He added that «Even looking five years from now, we don’t think the cost advantage will be completely overcome due to China’s structurally lower labor costs.”, in statements to CNBC.
A market in transformation
Overall, passenger car sales in the European Union, the United Kingdom and the countries of the European Free Trade Association fell 3.5% in January, to 961,382 units.
The gasoline segment suffered a drop of close to 26% year-on-year, while battery electric vehicles registered an increase of close to 14%.
Plug-in hybrids grew by 32% and conventional hybrids by 6%, confirming the progressive transition towards electrified technologies.
In this context, Tesla not only faces more intense competition, but also a market where the offer has expanded significantly. On the stock market, the company has accumulated a drop of approximately 11% so far this year.