Europe: Musk’s Political Detour Costs Tesla Dearly

Tesla hit an iceberg in Europe this January. Sales plummeted 45% compared to last year. The company delivered just 9,945 vehicles across the continent, down from 18,161 in January 2023.

Elon Musk’s political adventures aren’t helping. His endorsement of Germany’s far-right AfD party may have backfired. Tesla sales in Germany fell 60%, with only 1,277 cars sold, the lowest since July 2021. The backlash highlights a growing risk: customers may not want their car purchases tied to a CEO’s controversial politics.

The Model Y refresh caused additional turbulence. Tesla’s Berlin factory paused production to retool for the updated “Juniper” Model Y, leaving customers either unable to get cars or waiting for the new version. Showrooms were quieter than usual.

December’s sales push created a January hangover. Tesla front-loaded sales in December, which made up 13% of their 2023 European deliveries. This aggressive year-end push left demand deflated in January.

Meanwhile, competition surged. European EV sales grew by 37%, while Tesla’s market share dropped from 1.8% to 1%. Volkswagen and other legacy brands gained ground, proving Tesla’s dominance is no longer a given.

Why this matters:

• Tesla’s European stumble shows that CEO political activism can repel customers.

• European automakers have finally caught up, proving that Tesla can no longer rely on an early-mover advantage.

• The Tesla brand has shifted from an environmental leader to a political lightning rod, showing how quickly brand equity can erode when a CEO overshadows the company.

Read on, my dear: