Tesla The company’s market share in Europe kept declining year-over-year in February, according to data released on Tuesday. This drop occurred even though electric vehicle registrations were increasing across the continent, marking the second consecutive month of decreased sales for the all-electric automaker.

With increasing competition and as part of preparations for launching its new Model Y compact SUV, Elon Musk The battery-electric (BEV) division of the company has reported a 42.6% decrease in car sales across Europe up until now this year, according to figures released by the European Automobile Manufacturers Association (ACEA).

In February, Tesla held 1.8% of the overall market and 10.3% of the BEV market, which represents a decline from 2.8% and 21.6%, respectively, compared to the previous year.

It sold less than 17,000 vehicles in the European Union , Britain and European Free Trade Association countries, as opposed to more than 28,000 in the corresponding month of 2024.

Currently, Tesla encounters several difficulties in the European market. The company offers a more limited range of vehicles compared to its competitors, which includes both established car manufacturers and emerging players from China. Moreover, these rival companies are continually introducing newer, frequently less expensive electric vehicle options.

The company's CEO, Musk, has additionally sparked debate by seeking alliances with far-right groups in Europe, contributing to Tesla's decline in sales.

In these markets, BEV sales increased by 26.1% compared to February 2024, whereas overall automobile sales decreased by 3.1%, as reported by the ACEA.

A recent EU filing revealed that Tesla has established a fund aimed at selling carbon credits to over six automobile manufacturers. This initiative comes as these carmakers strive to comply with new European CO2 emissions standards implemented in January.

Based on estimates from 2024 data, experts suggest that Tesla's sales could sufficiently offset the emissions of other companies. However, this scenario may alter if Tesla’s sales keep declining.

The European Union established these goals to boost the adoption of electric vehicles within the union. However, it is anticipated that they will approve on Tuesday a modification of these regulations, permitting a three-year average for fleet emissions instead.

Although overall new car registrations in the European Union dropped by 3.4% in February, battery electric vehicle (BEV) sales surged by 23.7%, marking their second successive rise. Additionally, hybrid electric vehicle (HEV) sales increased by 19%.

Electric cars – whether Battery Electric Vehicles (BEVs), Hybrid Electric Vehicles (HEVs), or Plug-In Hybrids (PHEVs) – made up 58.4% of all passenger vehicle registrations in the region during February, an increase from 48.2% in the previous year.

'Europe's electric vehicle market has begun 2025 with great promise,' said Chris Heron, the secretary general of E-Mobility Europe, to Reuters.

We are witnessing the initial effects of manufacturers' strategies to comply with the EU's upcoming CO2 restrictions.

In February, among the leading car manufacturers in Europe, Volkswagen and Renault saw their sales increase by 4% and 10.8%, respectively, across the EU, Britain, and EFTA nations. In contrast, Stellantis experienced a decline of 16.2% in sales during the same period.

Despite the effect of EU tariffs on Chinese-built electric vehicles, sales at SAIC Motor increased by 26.1%, whereas they dropped by 15% at Volvo, which is owned by Geely.

The market share of brands excluded from ACEA statistics, such as BYD and other Chinese automakers, increased to 2.5% from 1.5% compared to the previous year.

In the month, total car sales in Spain increased by 11% compared to the previous year, whereas other significant markets experienced declines. Registrations dropped by 6.4% in Germany, 6.2% in Italy, and 0.7% in France.

Read more