Tesla sales fall by up to 66% in Europe and UK
Thu, 06 Feb 2025
The Tesla Model S, Model 3, Model X and Model Y range of electric cars has dominated electric vehicle sales charts and awareness since 2013. Yet 2025's first month shows a dramatic fall in registrations. It could be the influence of Musk's new role in global politics, or it could be that rivals are starting to make better EVs.
Tesla, the car company, is much bigger than Elon Musk. Yet, as the financial and PR powerhouse behind the brand's growth and perception there's no denying that the CEO has added value to the brand when you see equally bold, competent firms such as Fisker launch - then fail - in attempts to take that top spot.
But the CEO is busy showing 'gestures of love' to American political groups that look a little suspect. He's playing with US administration budgets and departments that voters didn't get a say in. And the main headlines he's generated for Tesla have been around fighting shareholders to keep his immense salary from the firm while launching a delayed, flawed and largely-derided electric pickup - the Tesla Cybertruck.
Given the allegiances Elon Musk has formed, promoted and seemingly, embraced since his purchase of Twitter (now X) is it any wonder that nations with a strong memory of Germany in the 1930s are backing away from the car brand he represents?
How has Tesla performed since Elon's antics?
There has been a drop in sales for some US states, but it's the UK and European market where the biggest falls are seen. This is against a backdrop of greater incentives for electric vehicle buyers and lower retail prices across the Tesla range, and a second-generation Tesla Model 3 'Highland' going on sale.
It's not just the number of registrations, it's how they sit within the overall sales. We've looked at Tesla registrations year-on-year for January 2024 and 2025 alongside the total registrations for those months to get a picture of how far Tesla's UK market share has fallen and in two of the largest markets for electric cars.
| Country | Fall in market share | January 2024 | January 2025 | Percentage drop |
| Norway | 70% | 1147 | 696 | 39% |
| Sweden | 51% | 727 | 405 | 44% |
| UK | 5% | 1581 | 1458 | 7% |
Sources: SMMT (UK), Mobility Sweden, Mobility Norway
The pattern is similar across Europe, where sales in France fell 63% and Germany, 41%. The Netherlands also saw a fall of 42%.
Does it matter if Tesla sales fall?
Tesla is more than just a car company. As the only independent, wholly-electric car manufacturer to achieve significant volume sales (the others are part of groups that make combustion and hybrid cars as well) it helps other brands meet targets for reduced emissions and EV sales without forcing change on the consumer too quickly.
The impact for British buyers could be felt as higher prices, or simply a reduced range of petrol, diesel or hybrid cars to choose from with more powerful, higher-end models dropped from the range by manufacturers who aren't benefitting from selling EVs themselves. Tesla's list price would also have to increase.
What can Tesla do to reverse the trend?
A new Tesla Model Y has been announced, and in the last investor relations it was revealed that Tesla has achieved significant reductions in CoGs – cost of goods – so could theoretically drop prices or add incentives.
But the general feeling is that Elon Musk's visibility as CEO of the brand is now doing more harm than good, and it seems likely that if it can do so, Tesla will find a way to replace him as CEO and make it obvious that as an individual, he really has very little to do with the cars and technology buyers get.
How will falling Tesla sales impact other brands?
Key to Tesla's success in Europe is the system of emissions-based penalties and incentives for manufacturers that motivates the industry towards all new car vehicles being zero-emission from 2035. Britain's most recent VETS (vehicle emissions trading scheme) legislation came into effect in 2023.
At the heart of it is the ability for manufacturers to pool and trade credits for selling zero-emission vehicles, which then offset penalties for selling vehicles that don't meet the fleet average CO2 target.
Fail to meet the CO2 target during the year and the following year's target is reduced by the amount of excess CO2 across the fleet. For example, if the fleet target is 140g/km and registrations equate to 142g/km, the following year will be 138g/km. Not helpful if your best-selling car was tailored to sit at 139g/km.
That's just a baseline. Sales of zero-emissions vehicles unlock more allowed registrations of non-zero emissions, or the purchasing of higher CO2 limits. Ultimately, the manufacturers get fined for every car registered outside of those allowances which means trade in emissions credits is crucial.
Tesla is not only an independent brand and manufacturer, it is wholly electric and sells cars in significant volumes – every credit it gets under emissions trading schemes is only useful to trade, it has no non-zero emissions vehicles to sell.
In other words, if Tesla sales fall, there are fewer emissions credits available for other manufacturers to buy.
Does Tesla's fall in sales reflect other EV brands?
No. It most cases it reflects a fall where other brands have made gains – as an example, BYD shows a 550% increase for the UK market.
In Britain, year-on-year sales of electric vehicles (BEVs) for January rose 41%, with 29,634 registered in 2025 compared with 20,935 in 2024.
The market share of BEVs has fallen however, with more petrol models registered in 2025. This highlights problems faced by the government's 2030-2035 ZEV (zero-emissions vehicle) mandate, but British EV sales are still moving in the right direction.
Volkswagen's EV sales almost doubled for January compared with last year, and BMW is the best-selling EV brand for the same period. There are more EVs on the market. And they're eroding the range advantage Tesla offered without introducing the minimalist, unfamiliar control environment found in the new Model 3 and Y.
Tesla's January fall matters. It was the best-selling electric car brand in the UK for 2024, taking both first and second place with the Model 3 and Model Y respectively.
While the UK figures don't reveal quite as dramatic a fall as some markets other sources reported up to 12%, and tax changes will only make Tesla less appealing as it occupies the premium end of the UK market and attracts a higher first-year rate of VED.
