“Elon, we have a problem:” Tesla share of Europe car market falls by half

The latest data coming out of the car industry in Europe highlights the depth of Tesla problems on the continent, with its overall market share plunging by one half over the last 12 months.

The highly respected analysts group Schmidt Automotive Research data last week published data and a graph (see below) that show Tesla’s share of the West European new passenger car market has sunk to its lowest level in almost three years.

It says that in the first quarter of 2025, Tesla’s share of the overall new car market – across all fuels – was just 1.7 per cent, compared to 3.4 per cent in the last quarter of 2024.

Overall sales were down more than a third, or 36.3 per cent, to 52,300 units, nearly treble the percentage fall of Tesla’s global sales (13 per cent), compared to the same period a year ago.

“Elon, we have a problem,” Schmidt wrote, adding that Tesla finds itself at a “fork in the road”, echoing the observations and concerns of multiple auto and investment analysts in the US.

There has been huge debate over the cause of Tesla’s sales slump, with some blaming increased competition, others the re-tooling for the refreshed Model Y, and others pointing to the fact that Tesla has become a proxy for people unhappy with the Trump administration and Elon Musk’s own actions, including his vocal support for far right parties in Europe.

Schmidt says all three factors will have played a role.

“Alongside the likely delay in consumers taking delivery of the Model Y refresh until the final month of the quarter and the potential political hit from Musk’s increasingly polarising comments and support for various political fractions across Europe, it could also show increasing competition from incumbents aiming to reach new EU-wide CO2 fleet targets from 2025,” it says.

Schmidt notes the resurgence of Volkswagen Group, which accounted for 28% of Europe’s new battery electric vehicle car market. On a 12 month rolling basis, VW had a share of more than 22 per cent in the EV market, compared to Tesla’s 15.5 per cent.

This is despite the stalled efforts of Chinese competition, which has been frustrated by anti-subsidy tariffs imposed by the EU on Chinese BEVs last November 2024, with the Chinese car makers turning to hybrids and internal combustion engines instead.