Elon Musk, chief executive officer of Tesla Inc., during the World Economic Forum (WEF) in Davos, Switzerland, on Thursday, Jan. 22, 2026.
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U.S. electric vehicle maker Tesla‘s sales in Europe were down for a 13th consecutive month in January, while its biggest Chinese rival saw another surge.
Data published Tuesday by industry lobby group ACEA, or the European Automobile Manufacturers Association, found that Tesla’s new car registrations fell to 8,075 in January, down 17% from a year ago, representing the 13th consecutive month in which sales have shrunk.
Tesla’s market share across the European Union, Britain, Switzerland, Norway and Iceland fell to 0.8%, meanwhile, down from 1% in the same month last year.
It marks another “very weak” start of the new year for Elon Musk‘s company, Rico Luman, senior sector economist for transport and logistics at Dutch bank ING, told CNBC by email.
“Tesla’s image has deteriorated in Europe last year and people have much more choice now with the range of new affordable EVs (including those of BYD and others like MG and ZEEKR) entering the market, while Tesla lacks new models,” he added.
Tesla’s focus on autonomous driving, rather than introducing new vehicles and expanding its range of mass models, is likely a factor too, Luman said.
“Another thing in Europe is that large numbers of first generations of Tesla’s are remarketed at the moment (after being leased for 4-6 years), this has driven second hand prices down,” Luman said, adding that there’s an abundance of competitively priced Tesla’s available on the used market.
A Tesla car is being charged at a Tesla electrical vehicle charging station in Norheimsund, Norway, Aug. 22, 2025.
Sergei Gapon | Afp | Getty Images
Tesla has been beset by challenges in Europe, including robust competition, particularly from Chinese car brands. It’s also struggled to shake off reputational damage from Musk’s rhetoric and close relationship with the Trump administration after the U.S. president returned to office last January.
Musk spent nearly $300 million to help elect U.S. President Donald Trump to a second term and subsequently led a tumultuous initiative to slash federal agencies. Protests erupted at Tesla dealerships across Europe at the height of Musk’s involvement with the White House.
Musk’s relationship with Trump later cooled, following a bitter online feud with the U.S. president.
Shares of Tesla were 0.5% lower in premarket trading on Tuesday. The company is off by around 11% year-to-date.
BYD continues its rapid growth
Chinese EV giant BYD continued its rapid growth in Europe at the start of 2026, per the ACEA data. New car registrations for the company rose by 165% year-on-year to 18,242 in January.
BYD also more than doubled its market share across the region, hitting 1.9% last month, up from 0.7% in January 2025. Tariffs have largely kept the company out of the U.S., including a 100% levy on Chinese EVs.
Michael Field, chief equity strategist at Morningstar, said one of the main problems for companies such as Tesla is that Chinese automakers like BYD have an insurmountable cost advantage.
“The big question now is ‘will this trend continue?’. The answer, unfortunately for European automakers and Tesla, is yes,” Field told CNBC by email.
“Even looking 5 years out, we don’t believe the cost advantage will be completely breached because of China’s structurally lower labour costs,” he continued.
“There is some good news however, that European automakers and Tesla are learning. The cost gap in terms of battery and auto production is slowly closing, and these firms are introducing more models at lower price points, which should help reduce the hemorrhage in market share.”
Overall, sales in the European Union, Britain and European Free Trade Association (EFTA) countries, fell 3.5% to 961,382 cars in January.
Petrol car registrations fell about 26% year-on-year in January, while battery-electric, plug-in hybrid and hybrid-electric cars were up nearly 14%, 32% and 6%, respectively.
