By Alessandro Parodi and Nick Carey
(Reuters) – In January, Tesla faced decreased sales in several European countries, including the United Kingdom and France, as rival companies introduced newer models and public sentiment towards CEO Elon Musk soured. Musk’s involvement in politics, particularly his financial support of Donald Trump during the 2024 election, has garnered attention, leading to mixed reactions from the public. Additionally, his public endorsements of far-right parties in Britain and Germany on social media platform X have sparked controversy.
Data from New AutoMotive revealed a nearly 12% drop in Tesla’s sales in the UK in January, despite a surge in monthly electric vehicle registrations in Europe. The decline in sales extended to other countries, with a 63% decrease in France, and drops of 44%, 38%, and 42% in Sweden, Norway, and the Netherlands respectively. In California, Tesla’s sales also declined by 12%. While Tesla remains a top seller of electric vehicles in the United States, the company experienced its first annual decline in deliveries in 2024.
Despite plans to introduce more affordable electric vehicles in 2025 and a focus on autonomous driving technologies, Tesla has faced challenges in the market. Musk’s influence on the brand has become divisive, leading to a shift in consumer preferences. Competitors like Volkswagen, Mercedes, and Peugeot have seen an increase in sales, pushing Tesla down to the seventh spot in the UK for EV sales in January 2024.
Consumer sentiment towards Musk has been mixed, with a survey indicating that his influence could deter potential buyers of Tesla vehicles. As competition in the EV market intensifies, consumer choices have expanded, impacting Tesla’s market position. European politicians have also criticized Musk’s recent remarks, particularly his support for far-right groups, leading to concerns about the spread of misinformation.
While Musk’s actions have drawn criticism, the core issue for Tesla appears to be its failure to launch a new mainstream model since 2020, while competitors have introduced fresh products. As Tesla navigates these challenges, it will be crucial for the company to address market dynamics and consumer perceptions to sustain its position in the evolving electric vehicle landscape.
“American or British drivers’ perceptions of Musk – they haven’t been as innovative since the Model Y,” he remarked on Tesla. Despite these observations, the company’s stock has continually outperformed the market, seeing a more than doubling in share value over the last year. Currently, the stock is trading at a forward price-to-earnings ratio exceeding 131, surpassing not only traditional automakers but also high-flying tech stocks with P/E ratios in the 20s, as per LSEG data. (Reported by Alessandro Parodi in Gdansk and Nick Carey in London; Edited by David Gaffen and Matthew Lewis)
