Tesla’s Sales in Germany Plummet Amid Broader European Slump and Backlash Over Musk’s Politics
The situation is stark: Tesla’s sales in Germany, Europe’s largest electric vehicle (EV) market, plunged a staggering 76% in February compared to the same month last year, according to the German Association of the Automotive Industry. This marked the second consecutive month of declining sales in the country. The drop is part of a larger downturn across Europe, where Tesla’s once-dominant position in the EV market is being eroded by a combination of factors, including growing competition, shifting consumer sentiment, and heightened scrutiny over Elon Musk’s polarizing political activities.
Musk’s Political Agenda Sparks Controversy and Deters Customers
Elon Musk’s increasing involvement in controversial political campaigns has become a lightning rod for criticism, particularly in Europe. Since Musk began openly supporting far-right parties and figures on X, the social media platform he owns, Tesla has faced a backlash from customers who perceive the brand as aligning with divisive political ideologies. For instance, in Germany, Musk’s endorsement of a far-right party ahead of recent parliamentary elections and his comments about moving beyond "a focus on past guilt" appear to have alienated a significant portion of the customer base. Similar trends are evident in other European countries, where demand for Tesla vehicles has dropped sharply.
Tesla’s Share Price Tumbles as European Sales Fall
The fallout from Europe has had a direct impact on Tesla’s share price, which has fallen over 40% since its peak in December. This decline has wiped out all the gains made after Donald Trump’s presidential victory in November, when investors initially bet on Musk’s influence in the White House to benefit his businesses. The sharp drop in Germany, where Tesla sales were once booming, has been a significant contributor to this downturn.
Sales Slump Across Europe: France, Norway, and Beyond
The sales decline is not limited to Germany. In France, Tesla’s February sales dropped by more than 26% year-over-year, according to the PFA automobile organization. Norway, a key market for Tesla, saw its sales nearly halve in February, despite the country’s strong push toward electrification. Even in the UK, where Tesla bucked the trend with a 20% increase in February sales, the brand’s market share still shrank. Analysts suggest that while some customers may be waiting for an updated Model Y, the scale of these declines points to broader challenges for the company.
Musk’s Vision for the Future Faces Intense Competition
Elon Musk has remained optimistic, arguing that Tesla’s growth will depend on advancements in autonomous driving technology and the rollout of a planned "Cybercab" service. However, this vision faces stiff competition. Waymo, a unit of Alphabet (Google’s parent company), is already offering driverless taxi services in multiple U.S. cities and expanding rapidly. In China, where Tesla production fell by nearly 50% in February, the company faces fierce competition from domestic automakers like BYD and Xiaomi.
Investors Demand Accountability Amid Mounting Pressures
As Tesla grapples with these challenges, some investors are calling for greater accountability. Tulipshare, a shareholder advocacy group, plans to propose linking Musk’s pay to performance on environmental goals, social responsibility, and corporate governance at Tesla’s next annual meeting. This reflects growing concerns among investors about Musk’s divided attention between Tesla and his other ventures, including his role as director of the so-called Department of Government Efficiency. With the brand’s reputation under fire and its market position increasingly threatened, Tesla’s path forward remains uncertain.
