The sales numbers for Tesla vehicles in key European markets have plummeted sharply as new vehicle registrations in Germany and France experienced major decreases. The German trade group VDA reported that Tesla experienced a 60% drop in sales within Germany during January which became the largest decline among companies selling more than 1,000 vehicles in the country.
According to the French trade group PFA Tesla experienced a 63% decline in January sales throughout the country. The U.K. market showed Tesla sales declining by 8% although battery electric vehicles as a whole grew 42% year-on-year according to the U.K. Society of Motor Manufacturers and Traders.
Multiple elements seem to be causing Tesla to face difficulties in the European market. CEO Elon Musk’s political positions represent a significant aspect that affects Tesla’s business. The German federal election approach of the far-right AfD party gained support from CEO Elon Musk which caused widespread criticism among European consumers. The negative impact of Musk’s Trump administration relationship combined with his support for right-wing parties has likely damaged Tesla’s reputation among European consumers.
Tesla’s stock prices have shown negative impacts from the recent events. The stock price of Tesla (TSLA) declined by 3.6% on Wednesday and has dropped 6% since January while maintaining its double in value during the previous 52 weeks.
According to FactSet data Germany represents Tesla’s third-biggest revenue market behind China and the United States where it generates 2.2% of total sales. France, meanwhile, ranks as Tesla’s seventh-largest market, contributing 1.5% of total revenue. The electric vehicle market competition has increased while Tesla faces growing political challenges which creates significant obstacles for the company to achieve growth in Europe.
