Tesla car registrations in Europe fell by 17% in January, marking the 13th consecutive month of declining sales for the Elon Musk-founded company across the continent, according to data released Tuesday by the European Automobile Manufacturers’ Association.
A total of 8,075 new Tesla vehicles were registered in January 2026, down from 9,686 in January 2025. Tesla’s market share in the European Union, the United Kingdom, Switzerland, Norway, and Iceland decreased to 0.8%, compared to 1% during the same period last year.
“It’s another very weak start to the year for Elon Musk’s company,” said Rico Luman, a senior economist in the transport and logistics sector at Dutch bank ING, in comments to CNBC. “Tesla’s image has deteriorated in Europe over the past year, and people now have a lot more options with the arrival of a range of new and affordable electric vehicles – including those from BYD and others, such as MG and ZEEKR – while Tesla has no new models.”
Luman suggested Tesla’s focus on developing autonomous driving capabilities, rather than introducing new vehicles and expanding its model range, is a significant factor in the sales decline. He similarly noted an increase in the number of first-generation Teslas being resold after 4-6 years of leasing, leading to lower prices on the used car market and increased competition for new vehicle sales.
Tesla has faced numerous challenges in Europe, including increased competition, particularly from Chinese automakers. The company has also struggled to overcome reputational damage linked to Elon Musk’s rhetoric and his close association with the Trump administration following Donald Trump’s return to power in January 2025. Musk reportedly spent nearly $300 million supporting Trump’s re-election bid and subsequently led a controversial effort to downsize federal agencies, sparking protests at Tesla dealerships across Europe. The relationship between Musk and Trump later soured following a public online dispute.
While Tesla’s sales faltered, Chinese automotive giant BYD experienced substantial growth in Europe at the beginning of 2026. BYD registrations increased by 165% year-over-year, reaching 18,242 units in January, according to ACEA data. The company doubled its market share in the region to 1.9%, up from 0.7% in January 2025.
Despite facing tariffs, including a 100% tax on Chinese electric vehicles, BYD has gained significant traction in the European market. Michael Field, chief strategist at Morningstar, told CNBC that Chinese automakers like BYD possess an insurmountable cost advantage. “The considerable question now is ‘will this trend continue?’ And the answer, unfortunately for European automakers and Tesla, is yes,” Field said. “Even looking out over a 5-year period, we don’t believe the cost advantage will be fully eroded, due to the lower structural labor costs in China.”
car sales in the European Union, the United Kingdom, and the European Free Trade Association (EFTA) countries decreased by 3.5% to 961,382 units in January. Gasoline car registrations fell by approximately 26% compared to the same period last year, while battery electric vehicles, plug-in hybrid vehicles, and hybrid electric vehicles saw increases of nearly 14%, 32%, and 6%, respectively.
