Elon Musk’s Europe problem keeps getting worse

U.S. electrical car maker Tesla‘s gross sales in Europe have been down for a thirteenth consecutive month in January, whereas its greatest Chinese rival noticed one other surge.

Data published Tuesday by trade foyer group ACEA, or the European Automobile Manufacturers Association, discovered that Tesla’s new automobile registrations fell to eight,075 in January, down 17% from a yr in the past, representing the thirteenth consecutive month by which gross sales have shrunk.

Tesla’s market share throughout the European Union, Britain, Switzerland, Norway and Iceland fell to 0.8%, in the meantime, down from 1% in the identical month final yr.

It marks one other “very weak” begin of the brand new yr for Elon Musk‘s firm, Rico Luman, senior sector economist for transport and logistics at Dutch financial institution ING, informed CNBC by e-mail.

“Tesla’s image has deteriorated in Europe last year and people have much more choice now with the range of new affordable EVs (including those of BYD and others like MG and ZEEKR) entering the market, while Tesla lacks new models,” he added.

Tesla’s focus on autonomous driving, reasonably than introducing new automobiles and increasing its vary of mass fashions, is probably going an element too, Luman mentioned.

“Another thing in Europe is that large numbers of first generations of Tesla’s are remarketed at the moment (after being leased for 4-6 years), this has driven second hand prices down,” Luman mentioned, including that there is an abundance of competitively priced Tesla’s obtainable on the used market.

Tesla has been beset by challenges in Europe, together with sturdy competitors, significantly from Chinese automobile manufacturers. It’s additionally struggled to shake off reputational harm from Musk’s rhetoric and shut relationship with the Trump administration after the U.S. president returned to workplace final January.

Musk spent practically $300 million to assist elect U.S. President Donald Trump to a second time period and subsequently led a tumultuous initiative to slash federal companies. Protests erupted at Tesla dealerships throughout Europe on the top of Musk’s involvement with the White House.

Musk’s relationship with Trump later cooled, following a bitter online feud with the U.S. president.

Shares of Tesla have been 0.5% decrease in premarket buying and selling on Tuesday. The firm is off by round 11% year-to-date.

Chinese EV large BYD continued its fast progress in Europe at first of 2026, per the ACEA knowledge. New automobile registrations for the corporate rose by 165% year-on-year to 18,242 in January.

BYD additionally greater than doubled its market share throughout the area, hitting 1.9% final month, up from 0.7% in January 2025. Tariffs have largely saved the corporate out of the U.S., together with a 100% levy on Chinese EVs.

Michael Field, chief fairness strategist at Morningstar, mentioned one of many major issues for corporations similar to Tesla is that Chinese automakers like BYD have an insurmountable value benefit.

“The big question now is ‘will this trend continue?’. The answer, unfortunately for European automakers and Tesla, is yes,” Field informed CNBC by e-mail.

“Even looking 5 years out, we don’t believe the cost advantage will be completely breached because of China’s structurally lower labour costs,” he continued.

“There is some good news however, that European automakers and Tesla are learning. The cost gap in terms of battery and auto production is slowly closing, and these firms are introducing more models at lower price points, which should help reduce the hemorrhage in market share.”

Overall, gross sales within the European Union, Britain and European Free Trade Association (EFTA) international locations, fell 3.5% to 961,382 automobiles in January.

Petrol automobile registrations fell about 26% year-on-year in January, whereas battery-electric, plug-in hybrid and hybrid-electric automobiles have been up practically 14%, 32% and 6%, respectively.