Tesla Faces Steep Sales Decline in Europe and Australia Amid Political Backlash and Market Shifts

BERLIN — Tesla, the once-dominant electric vehicle (EV) manufacturer, is grappling with plummeting sales across key European markets and Australia, as new data reveals dramatic drops in February registrations. Analysts point to CEO Elon Musk’s polarizing political stance and intensified competition as primary factors eroding consumer confidence.

​Collapse in Germany: A Stark Contrast

Germany, Europe’s largest EV market, saw Tesla’s sales nosedive by ​76% year-on-year (YoY) in February, with only 1,429 vehicles registered, according to the Federal Motor Transport Authority (KBA)

​Widespread European Slump

The sales crisis extends beyond Germany:

• ​France: Tesla’s registrations dropped ​44% in the first two months of 2025
• ​Scandinavia: Norway (-48%), Sweden (-42%), and Denmark (-48%) all reported steep declines in February
• ​EU-Wide: The European Automobile Manufacturers’ Association (ACEA) reported a ​45.2% YoY drop in Tesla’s January registrations across the EU, EFTA, and the UK, plunging from 18,161 to 9,945 units

Despite these setbacks, the ​UK emerged as a rare bright spot, with Tesla’s registrations rising ​11% in January-February, buoyed by strong February deliveries. The UK overtook Germany as Europe’s largest EV market in 2024

​Australia: Model 3 Demand Craters

Tesla’s troubles are global. In Australia, February sales collapsed ​71.9% YoY to 1,592 vehicles, driven by an ​81% plunge in its entry-level Model 3

 

​Musk’s Political Gambit Backfires

Industry experts attribute Tesla’s struggles partly to Musk’s alignment with far-right political movements. Since December 2024, Musk has publicly endorsed Europe’s far-right parties, including Germany’s AfD, sparking protests and boycotts
In France, a Tesla dealership near Toulouse was vandalized in early March, with 12 vehicles destroyed.  Danish consumers are increasingly seeking alternatives, with one industry advisor noting, “Many say, ‘I want an EV, but not a Tesla’”

 

​Additional Headwinds

Beyond political fallout, Tesla faces:

1. ​Production Disruptions: Model Y factory retooling has slowed output of its top-selling vehicle.
2. ​Aging Lineup: Competitors like Volkswagen and BYD are gaining ground with newer models.
3. ​Tariff Risks: U.S. Bank of America warns that Trump-era tariffs could further strain Tesla’s North American operations.

​Analyst Outlook

While Morgan Stanley remains bullish, citing Tesla’s shift toward AI and robotics

, others are skeptical. Goldman Sachs cut its 2025 delivery forecast to 1.91 million units (7% growth), down from 1.96 million.

 

Conclusion
Tesla’s European and Australian sales collapse signals a pivotal moment. As Musk’s political entanglements alienate customers and rivals accelerate innovation, the EV pioneer must recalibrate its strategy to reclaim lost ground.

Sources: Federal Motor Transport Authority (Germany), European Automobile Manufacturers’ Association, Australian Electric Vehicle Association, Reuters, AFP.