Tesla sales in Europe are sliding. That's a problem for Elon Musk.

• Not content with shaking up US politics, Elon Musk is on a mission to "make Europe great again."
• His interventions into the continent's politics come as Tesla's sales plunge in Europe, falling 13% last year.
• Some of Tesla's rivals in Europe are now going after owners put off by Musk's politics.

As Elon Musk wades into European politics, Tesla's sales across the continent are plummeting.

The automaker saw sales of its EVs drop 13% in the European Union in 2024, according to data released by industry body ACEA this week, and is facing growing pressure in its third-largest market as rivals launch a wave of cheaper electric vehicles.

Tesla saw big drops in sales in major markets like Germany, France, and Italy, according to analysis from pricing consultancy Argus Media shared with Business Insider.

In Germany, the hub of Europe's auto industry and the home of Tesla's Berlin gigafactory, sales of Tesla vehicles fell by 41% in 2024, outstripping the 27% sales decline in the general battery EV market.

The company's woes come as wider EV sales dropped across Europe in 2024, driven by the end of key subsidies in several markets.

"The big picture is a shrinking EV market across Europe. But Tesla is shrinking faster than that, and in specific markets, it is outpacing that decline," Dylan Khoo, an analyst at Argus, told BI.

Stuttering sales

While Tesla's sales in markets such as Belgium, Netherlands, and Sweden rose last year, the overall picture in Europe is less than rosy for the automaker — especially with many of its rivals rolling out their own mass-market electric vehicles.

Swedish brand Volvo, which is owned by Chinese conglomerate Geely, saw its sales rise nearly 30% in the EU last year, driven by the popularity of its 36,000 euro ($40,000) EX30 electric crossover.

Rivals like Renault and BMW also saw their sales grow in Europe and the UK last year, with French firm Renault launching cheaper models including the baguette-holding R5.

Experts told BI that an increasingly stale product lineup had hit Tesla's European business.

The automaker has not launched a new vehicle in Europe since the Model Y in 2021. Its most recent EV, the Cybertruck, is not available in the UK or Europe.

"It's looking a little bit samey," said Philip Nothard, Insight and Strategy Director at Cox Automotive.

Nothard added that Tesla was facing a more crowded EV market in Europe and coming under pressure from domestic rivals and insurgent Chinese carmakers, who have ambitious growth plans for Europe.

Both Khoo and Nothard said that the recently unveiled revamped Model Y will be key to turning around Tesla's fortunes in Europe.

Deliveries of the updated SUV start later this year, and Tesla will be hoping the new Model Y will help the company bounce back after it recorded its first ever annual drop in sales in 2024.

Musk takes on Europe

Tesla's difficulties in Europe come as CEO Elon Musk continues to shake up European politics.

The billionaire caused outrage among many in Germany with his endorsement of AfD, a right-wing political party. German Chancellor Olaf Scholz branded Musk's support of the "extreme right" as "completely unacceptable."

Several German companies have announced they will stop buying Tesla vehicles over Musk's comments in recent months. On Wednesday, activists projected an image of a controversial gesture made by the Tesla boss at Donald Trump's inaugural parade onto the side of the company's Berlin gigafactory.

Musk has also become entangled in UK politics, feuding with British Prime Minister Keir Starmer and reportedly considering a donation to right-wing party Reform.

The controversy surrounding Musk has seen one of Tesla's rivals step up efforts to court disgruntled owners.

The CEO of EV brand Polestar said on Wednesday he had told the company's sales staff to target Tesla owners put off by Musk's push into politics and echoed Scholz in calling the billionaire's support of AfD "totally unacceptable."

"We get a lot of people writing that they don't like all this," Michael Lohscheller said in an interview with Bloomberg.

"It's important to listen closely to what they say. And I can tell you, a lot of people have very, very negative sentiment," he added.

Matthias Schmidt, a Germany-based automotive analyst, told BI he expected Musk's political involvements to eventually have an impact on Tesla's European sales, and said rivals like Polestar would likely reap the benefit of disgruntled Tesla owners ditching their vehicles.

"I expect Tesla's rivals are rubbing their hands together because this is the exact point where they need a big EV uptake for their own products," said Schmidt.

"The more Elon Musk continues to shoot himself in the foot, if you like, the more Germans and European manufacturers can only benefit. For them, it's like Christmas and all their birthdays coming all at once," he added.

However, Nothard said that consumers would ultimately be more concerned about factors such as price and performance, rather than Musk's politics.

"I don't think the consumer really connects it. Ultimately it's a car —do they like it, is it affordable to them? Does it fulfill the requirements of what they want? That's really what the consumer is looking at," he said.

Tesla did not respond to a request for comment, sent outside normal working hours.

Do you work for Tesla or own one of the compay's vehicles? Get in touch with this reporter at tcarter@businessinsider.com or tcarter.41 on Signal.