Tesla’s European market share continued to shrink in February. Sales of the all-electric car maker dropped for a second month even as EV registrations grew overall on the continent.
Competition is growing, and European economies are slowing down. This hampers total car sales. According to data from the European Automobile Manufacturers Association (ACEA), Elon Musk’s battery-electric (BEV) brand has sold 42.6% fewer cars in Europe so far this year.
Tesla commanded 1.8% of the total market and 10.3% of the BEV market in February. Last year, it held 2.8% and 21.6%, respectively.
It sold fewer than 17,000 cars in the European Union, Britain, and European Free Trade Association countries, compared to over 28,000 in the same month in 2024.
Tesla faces several challenges in Europe ahead of its new Model Y mid-size SUV launch this month. The EV maker has a smaller, aging lineup, while traditional automaker rivals and new Chinese entrants are launching new, often cheaper electric models.
Musk, the company’s CEO, has also stirred controversy by courting far-right parties in Europe. This has added to Tesla’s sales slump.
“It will be interesting to see to what extent demand rebounds once the new Model Y hits markets across the region,” said Felipe Munoz, Global Analyst at JATO Dynamics, in a report on Monday.
Overall, BEV sales in the same markets last month rose 26.1% versus February 2024. Total car sales fell 3.1%, according to the ACEA.
A growing interest in electric cars in the world’s second-biggest EV market is largely due to new EU emission targets and cheaper electric models. Market experts say that this is not enough to compensate for shrinking demand for petrol and diesel cars.
“We continue to expect global auto volume essentially flat” this year, Citi analysts said in a note.
An EU filing showed last week that Tesla had formed a pool to sell carbon credits to more than half a dozen automakers. They are trying to meet European CO2 emission targets that came into effect in January.
Analysts estimate that Tesla’s sales can more than compensate for those companies’ emissions based on 2024 figures. The situation might change if its sales continue to drop.
The EU introduced the targets to help EV pickup in the bloc. It is expected to approve a relaxation of those measures on Tuesday, to allow a three-year averaging of fleet emissions.
Total new car registrations in the EU fell 3.4% in February. BEV sales jumped 23.7%, a second consecutive increase, while hybrid car (HEV) sales rose 19%.
Electrified vehicles – either BEV, HEV, or plug-in hybrids (PHEV) – accounted for 58.4% of all passenger car registrations in the bloc in February. This is up from 48.2% a year earlier.
“2025 has started really brightly for Europe’s electric car market,” said E-Mobility Europe’s Secretary General Chris Heron.
“We are seeing the early impacts from manufacturer plans to meet the EU’s scheduled CO2 limits”.
Among Europe’s top-selling brands, Volkswagen’s and Renault’s sales rose 4% and 10.8%, respectively, from a year earlier in the EU, Britain, and European Free Trade Association countries in February. Stellantis’ sales fell 16.2%.
Sales at SAIC Motor rose by 26.1% from a year earlier despite the impact of EU tariffs on Chinese-made EVs. They were down 15% at Geely-owned Volvo.
The market share of brands not accounted for by the ACEA, including BYD and other Chinese carmakers, rose to 2.5% from 1.5% a year earlier.
Total car sales in Spain rose 11% year-on-year in the month. They declined in other major markets, with registrations falling 6.4% in Germany, 6.2% in Italy, and 0.7% in France.
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