Tesla Hits a Speed Bump in Europe: Trouble Ahead for Musk?

Elon Musk advances in politics, but on the business side, it’s a bit of a dry spell. While he positions himself as the unofficial leader of the DOGE department and flirts with the German far-right, his companies are suffering. Particularly Tesla, which is facing an unprecedented decline in Europe. Between fierce competition, a wait-and-see effect on the Model Y, and an image tarnished by the CEO’s antics, the brand is in turmoil.

Tesla: sales are collapsing in Europe

Nothing is going well for Tesla from Elon Musk in Europe. The figures for January 2025 are enough to give cold sweats: -47.7% registrations compared to the previous year. Some markets are in free fall, such as Spain (-75.4%), France (-63.4%), and Germany (-59%).

Even in California, the historical stronghold of the brand, Tesla is down 12%.

#Tesla Sales in Europe Plummet Amidst Elon’s Stupid Meddling… Sales are down in California the largest US EV market by -12%https://t.co/WqoyiTqiPs pic.twitter.com/GNSgqQI4KJ

— Морті Маніту 🇺🇦 at BlueSky now 🦋 (@MortyManitou) February 5, 2025

This shipwreck is not due to chance. First of all, the competition has awakened. Goodbye to the early monopoly, traditional manufacturers are seriously getting into electric vehicles. Volkswagen offers a model at €20,000, while Dacia is thriving with its Spring.

The result: Tesla, once indispensable, finds itself battling in a fiercely competitive market.

Then, a recurring problem has manifested again: the lack of stock. True to form, Tesla emptied its warehouses at the end of the year to boost its balance sheets, leaving January drained. Worse, the refreshed Model Y is not yet available in all its versions, forcing buyers to wait.

Needless to say, Tesla dealerships currently resemble deserts.

Elon Musk, the pebble in his own shoe

If Tesla cars are selling less, it’s also because of… Elon Musk himself. In Europe, his political positions are causing some grumbling. In Germany, where Tesla has its only European factory, Musk has chosen to support the AfD, a far-right party with rotten ideas.

He even gave Alice Weidel, one of its leading figures, a 75-minute platform on X, his social network. Suffice it to say that it’s not well received.

Elon Musk‘s great speech at our party convention! Make America & Germany great again! 🇺🇸🇩🇪 pic.twitter.com/XHtMIBfOYh

— Alice Weidel (@Alice_Weidel) January 26, 2025

Potential Tesla buyers are turning away in droves. A British survey indicates that 59% of electric vehicle enthusiasts would be put off by buying a vehicle stamped with Musk’s seal. A German entrepreneur even had to produce stickers stating: “I bought this car before Elon went crazy.”

Given the influx of orders, he has reason to rub his hands together.

$ARKK Cathie Wood predicts that in 10 years, autonomous taxis could cost as little as $0.25 per mile — compared to $2-$3 per mile for $UBER & $LYFT.

This is why Elon Musk is going all-in on $TSLA autonomy over its EV business. pic.twitter.com/XFIZAFLxLP

— Shay Boloor (@StockSavvyShay) February 4, 2025

But Musk, for his part, remains focused on another subject: vehicle autonomy. The famous Cathie Wood, head of the ARKK fund, predicts that autonomous taxis will cost $0.25 per mile in ten years, compared to $2 to $3 for Uber or Lyft.

Musk is betting everything on this technology rather than improving his current models. A choice that could very well cost him dearly.

The electric vehicle economy in turbulence

Beyond the Tesla case, the electric vehicle market is going through a turbulent time. In Germany and France, sales have slowed down after the elimination of certain government subsidies. However, the global market has bounced back, with a 50% increase in electric vehicle sales in Germany over one year. But Tesla is not benefiting from it: its market share is collapsing, falling from 14% to just 4%.

Model 3 vs Big SUV Tesla is the safest car in the world.🦾pic.twitter.com/R2ByEqKgzx

— TeslaDashCam (@TeslaCamera) February 4, 2025

Moreover, another report tarnishes the brand’s image: Tesla has the highest fatal accident rate among all automakers. According to a FARS study, its cars show a rate of 5.6 fatal accidents per billion miles driven, which is double the average.

The Model Y, the brand’s best-seller, even reaches a worrying record with a rate of 10.6.

Experts insist: these figures do not mean that Teslas are poorly designed. They are full of safety technologies and are even awarded by independent organizations. But a high-performing vehicle does not do everything: an inattentive driver or one too confident in the “autopilot” remains a public danger.

Despite this gloomy picture, not all is lost for Tesla. Indeed, the brand suffers in the automotive market, but it has found a windfall revenue source: bitcoin. Thanks to wise investments, Tesla posted a colossal profit of $600 million on its cryptocurrency holdings in the fourth quarter of 2024. Enough to cushion the drop in sales and maintain an edge… while waiting for better days for its electric cars.