Tesla experienced a significant dip in European sales last month, dropping just over 40%, as the electric vehicle (EV) manufacturer faced stiff competition and growing dissatisfaction tied to the political activities of CEO Elon Musk.
Sales of Tesla’s battery-powered vehicles across the European Union, European Free Trade Association, and the U.K. plummeted by 40.1% year-over-year in February, totaling 16,888 units. Year-to-date sales have also decreased by 42.6%.
The automaker’s regional market share contracted to 1.8% from 2.8% compared to the same period last year, according to data published Tuesday by the European Automobile Manufacturers’ Association.
Tesla’s weak sales came despite an uptick in overall battery electric vehicle (BEV) registrations in Europe, which rose by 26.1% year-on-year in February. Meanwhile, Tesla’s competitors, including China’s SAIC, reported robust growth during the month.
BEVs constituted the third-largest segment of European car sales during the January-February timeframe, with a market share of 15.2%. Hybrid electric vehicles (HEVs) remained dominant at 35.2%, while gasoline-powered cars held a 28.6% share.
Tesla’s sales slump unfolded against a backdrop of softer overall European car sales, as new vehicle registrations dropped 2.6% year-over-year in February. Nevertheless, major automakers like Volkswagen (ETR:VOWG_p), Renault (EPA:RENA), and BMW (ETR:BMWG) recorded improved sales.
In Europe, Tesla is facing multiple headwinds, including a lineup that is perceived as aging relative to newer and more affordable offerings from Chinese automakers. The company is preparing to release an updated version of its top-selling Model Y mid-size SUV, with Reuters reporting that Tesla may cut the model’s price by 20% in an effort to revitalize sales.
At the same time, Musk has attracted controversy for his political endorsements, including support for far-right factions in Europe. His connections to former U.S. President Donald Trump have also fueled public backlash. In recent weeks, Tesla facilities, showrooms, and vehicles have been targeted by protesters and vandalized across the U.S. and Europe.
Tesla’s challenges aren’t confined to Europe; the company has also been grappling with subdued demand in major markets like North America and China. Musk recently addressed Tesla employees at an all-hands meeting, urging them to retain their stock holdings.
Tesla shares, which have declined by over 26% so far this year, were down slightly in premarket U.S. trading on Tuesday.