Elon Musk's involvement in politics may have taken a toll on Tesla's sales performance in Europe, with its share price falling the most of the seven big-name stocks this year. Sales of Tesla electric cars plunged across Europe in January, suggesting that CEO Elon Musk's political intervention may have deterred European buyers.
Shares in the US electric carmaker plunged 8.4 % on Wednesday and their market value fell below $1 trillion (CZK 0.95 trillion), erasing most of the gains from the Trump-led rally. Tesla shares are the biggest faller among the "Magnificent Seven" stocks, down 22 % in 2025 and plunging 37 % after hitting a high on December 17 last year, severely impacting the group's performance.
Tesla's EV sales in Europe decline
According to the European Automobile Manufacturers Association (ACEA), Tesla sold 9,945 vehicles in Europe in January, 45 % fewer than in the same period last year, although overall EV sales in the sector rose by 37 %. In 2024, Tesla's vehicle sales in European Union countries fell by 13 %, with the biggest decline in Germany, where they fell by 41 %. Tesla's market share in Europe fell from 1.8 % to 1 %, and according to French industry association LaPlateforme Automobile, Tesla vehicle registrations in France fell by 63 % in January to 1,141 vehicles, the fewest since August 2022. In addition, monthly sales in Germany fell to 1,277 vehicles, the fewest since July 2021, according to Bloomberg's database. Tesla also sold fewer vehicles in the U.K. last month than its Chinese rival BYD for the first time.
Musk's political controversy
Musk, who is a prominent supporter of US President Donald Trump, is heavily involved in commenting on European political issues. In public contributions and in his X media, he supports the German far-right party Alternative for Germany (AfD), referring to the fact that "only the AfD can save Germany". On Monday, he congratulated party co-leader Alice Weidel on her party's result in the German elections.
Musk has also criticised British Prime Minister Keir Starmer and other politicians over the child sex abuse scandal in Rotherham in the north of England. In addition, Musk's close relationship with Trump may have fuelled the controversy. The US president initiated peace talks with Russia on Ukraine without the participation of European officials, which, alongside his tariff threats to the EU, has provoked resentment from member states. Musk is now a Trump adviser, employed by the Trump administration as the Department of Government Efficiency's chief administrator, helping the US president to cut thousands of federal employees. His high-profile political stance has potentially had an impact on Tesla's declining sales in Europe, although it is unclear to what extent.
Warning demands and growing competition
Weakening demand and increasing competition are also posing an obstacle to growth for the world's leading manufacturer of electric vehicles from the end of 2023. High inflation and a stagnant economy have weighed on consumer demand in the EV markets in 2023 and 2024. Meanwhile, Chinese competitor BYD has increasingly taken market share from Tesla. In addition, China's tech rally in the wake of the launch of the open-source artificial intelligence model DeepSeek has buoyed its stock markets, diverting funds away from U.S. tech companies.
Earlier this month, BYD, China's largest electric car brand, announced that it would be partnering with DeepSeek to develop its autonomous technology. The news alarmed Tesla shareholders and triggered a sharp sell-off in Tesla's stock. Tesla's main concern is its competitiveness in the fully self-driving vehicle (FSD) market against BYD.
DeepSeek's artificial intelligence (AI) model is seen as a key advance in the technology race between the US and China. On the day of BYD's announcement, Elon Musk was reportedly leading a group of investors looking to acquire OpenAI, owner of ChatGPT, which currently owns the most advanced large language model (LLM) for generative AI technology. But DeepSeek's R1 AI model turned out to be just as good as the top US models, and at a fraction of the cost.
euronews/ gnews.cz - RoZ
PHOTO - X Tesla Owners Silicon Valley
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