Key takeaways
- Tesla’s European new-car registrations fell 17% year over year in January to 8,075 units across the EU, U.K., Switzerland, Norway and Iceland, cutting its market share to 0.8% from 1.0% a year earlier.
- BYD registered 18,242 vehicles, up 165% year over year, raising its share to 1.9% from 0.7% in January 2025.
- Competition from Chinese brands and value-focused European rivals is intensifying, pressuring pricing and margins in both new and used markets.
Why Tesla is losing ground
- Product cadence: More affordable EV choices (BYD, MG, Zeekr) are arriving while Tesla lacks new mass-market models; emphasis on autonomous driving over new launches may be a headwind.
- Used-car overhang: Large volumes of first-generation Teslas are coming off 4–6 year leases, boosting supply and pushing down second-hand prices, potentially cannibalizing new sales.
- Brand headwinds: Reputational turbulence tied to Elon Musk’s politics and protests in Europe may be weighing on perception, though tensions later cooled.
Broader market context
- Overall January sales in the EU, U.K. and EFTA fell 3.5% to 961,382 units.
- Powertrain mix shift: petrol -26% year over year; battery-electric +~14%; plug-in hybrids +32%; hybrid-electrics +6%.
- Trade landscape: A 100% U.S. levy limits Chinese EVs like BYD in America, while Europe’s comparatively lower barriers allow China-based brands to compete directly on cost.
Cost dynamics and competition
- Analysts cite a structural cost advantage for Chinese automakers (including labor costs); the gap is narrowing as Western brands improve battery and manufacturing efficiency and launch lower-priced models.
- BYD’s expanded lineup and cost discipline are helping it outpace overall EV segment growth in Europe.
Implications and outlook
- Tesla priorities: refresh the lineup, manage used-vehicle supply and residuals, and reduce costs to support sharper pricing without eroding margins.
- Watch in Q1: pricing actions, incentives, deliveries, earnings commentary, and ACEA’s next monthly data to see if January’s trends persist.
- Europe is likely to remain the primary battleground for market share if U.S. tariffs continue to constrain Chinese EVs stateside.
Tesla’s stock dipped 0.5% in premarket trading Tuesday and is down about 11% year to date.
