Bitcoin, emissions credits and promises about artificial intelligence can only do so much. Like it or not, Tesla is still a car company. And Tesla’s sales are not off to a great start in 2025.
In recent days, full-year and January sales results from various markets around the world indicate a bleak picture for the Elon Musk-led electric vehicle company. Even as it added the Cybertruck to its lineup in large volumes last year—which should have unlocked more buyers in America’s expansive pickup truck field—Tesla is seeing serious declines in places where it once had a near-lock on electric sales. Let’s take a look at some of the areas taking the hardest hits.
As various outlets covered this week, the California New Car Dealers Association’s (CADA) latest data indicates that EV sales leveled off in the Golden State last year, holding steady at 25.3% of new-car sales and just slightly up from 2023’s result of 25%. Granted, while it’s quite impressive for one in four new cars sold in California to be entirely electric, a slowdown in once-rapid EV growth has coincided with a big decline in Tesla sales.
Their report doesn’t mince words. “All of the decrease in the state market last year was attributable to Tesla, which had an 11.6% decline,” it said. “Registrations for all other brands increased 1.4%.” And that’s for all new passenger vehicle registrations in California, not just EVs.
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The new Tesla Model Y will be released globally in March. Can it help reverse these sales declines?
Toyota, Tesla, Honda, Ford, and Chevrolet were the market-share leaders in California last year, and the Tesla Model Y kept its “best-selling light truck” crown. Yet California saw almost 30,000 fewer Model 3 registrations compared to 2023. The Model Y fared better, but was still down more than 4,000 units. The Cybertruck was California’s top-selling electric truck, but cracked a mere 9,019 registrations—not quite what you’d expect in an affluent, EV-friendly market and the one where Tesla was born. That was only 434 registrations off the aging and expensive Tesla Model X, for example.
The story gets worse in other parts of the world. In Germany, where Tesla was the longtime EV sales leader even as new entries from Volkswagen, BMW, Audi and various Chinese brands started showing up, sales declined a whole 60% in January—just 1,277 registrations in Europe’s biggest car market, according to Fortune. Tesla’s sales were also down 63% in France in January, another large car market, from a year earlier. They also dropped 8% in the UK year-over-year in January even as all-electric vehicle sales rose to 21% of the British new car market, a seven-point increase from 2024. “No Tesla cracked the UK’s top 10 best-seller list last month, something that has regularly happened in the past,” Ars Technica reported this week.
And one trend that’s especially worth watching is what’s happening in China, which makes up more than a third of Tesla’s global sales. In China, which leads the world in total all-electric and hybrid sales, Tesla dropped 11.5% in January.
There are a few things that should be taken into account for these sales declines. Tesla once dominated EV sales but new competitors are showing up left and right, including in areas where Tesla doesn’t play, like three-row SUVs. In China, sales often slow around the Lunar New Year holiday festivities and Tesla also implemented factory upgrades at its Gigafactory Shanghai plant to build the updated “Juniper” Model Y. And in several European markets, EV sales have been uneven or outright declined as various countries ended their subsidy programs; as a result, there are now calls for EU-wide subsidies that would promote growth across the entire bloc to counter new imports from China.
But one factor feels inescapable at this point: the backlash to Elon Musk’s increased involvement in politics. In the U.S., the Tesla CEO spent the past week—illegally, according to many lawyers and constitutional scholars—breaching the U.S. Treasury Department’s payment systems as part of President Trump’s effort to unilaterally defund various government agencies. In Germany, Musk’s vocal support of the far-right Alternative for Germany (AfD) has been widely cited as a turn-off for EV buyers, and the same has been said of his politics in the UK.
Though it’s hard to gauge empirically, Musk’s far-right political turn does seem to be having an effect on Tesla sales—especially among the more affluent, urban progressive-to-centrist buyers traditionally more inclined to buy EVs in many places. A recent report from the nonpartisan EV Politics Project indicates that Tesla and Musk are losing support among EV intenders and Democratic-leaning buyers faster than they’re gaining support from people on the other side of the political spectrum, who tend to be less interested in EVs. In other words, Musk is losing Tesla sales ground with the traditional EV base, and not making it up with any of his new supporters.
Photo by: InsideEVs
EV Politics Project Slide
“Republicans are creeping toward greater EV acceptance and willing or not, Elon’s journey to MAGA may have helped that,” the group said in its latest report. “Meanwhile, the Elon-driven Tesla headwinds problem among non-Republican consumers is clearly growing.”
Though Tesla’s stock surged after the election, attributed to investor faith in Musk’s close relationship with Trump being able to help clear hurdles for goals like autonomous car deployment, it has sunk in recent days due to these dismal sales reports.
The biggest thing to watch this year may be the release of the updated Model Y. In theory, a big refresh for the world’s best-selling EV (and by some metrics, best-selling car, period) should jump-start sales in a major way. But if buyers are counting out the brand because of Musk, the success or failure of that car will be the ultimate barometer.
Contact the author: patrick.george@insideevs.com
