Tesla CEO Elon Musk attends the World Economic Forum (WEF) in Davos, Switzerland on Thursday, January 22, 2026.
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US electric car manufacturer teslaThe company’s European sales fell for the 13th consecutive month in January, while its biggest Chinese rival surged again.
Tesla’s new car registrations in January fell 17% year-on-year to 8,075 vehicles in January, marking the 13th consecutive month of declining sales, data released by the industry lobby group ACEA on Tuesday showed.
Meanwhile, Tesla’s market share in the European Union (EU), UK, Switzerland, Norway and Iceland was 0.8%, down from 1% in the same month last year.
Rico Luman, senior sector economist for transportation and logistics at Dutch bank ING, told CNBC in an email that this is another “very weak” start to the new year for Elon Musk’s company.
He added: “While Tesla’s image has deteriorated in Europe over the last year and Tesla lacks new models, new affordable EVs (including BYD, MG, ZEEKR, etc.) have entered the market, giving people far more choice.”
Luhmann said Tesla’s focus on self-driving rather than introducing new cars or expanding its mass-market lineup is also likely a contributing factor.
“In Europe, many first-generation Teslas are now being resold (after being leased for four to six years), which is driving down used prices,” Luhmann said, adding that the used market is plentiful with competitively priced Teslas.
A Tesla car is being charged at a Tesla electric vehicle charging station in Norheimsund, Norway, August 22, 2025.
Sergei Gapon | AFP | Getty Images
tesla Europe is particularly plagued by challenges, including intense competition from Chinese car brands. The company has also struggled to overcome the reputational damage caused by Musk’s comments and close ties to the Trump administration after the U.S. president returned to office last January.
Mr Musk spent nearly $300 million to help elect US President Donald Trump to a second term and then led a huge uproar to cut federal agencies. At the height of Musk’s involvement in the White House, protests erupted at Tesla dealerships across Europe.
The relationship between Mr Musk and Mr Trump has since soured due to a heated online spat with the US president.
Tesla stock fell 0.5% in premarket trading Tuesday. The company’s stock price has fallen about 11% since the beginning of the year.
BYD continues to grow rapidly
According to ACEA data, Chinese EV giant BYD continued its rapid growth in Europe in early 2026. The company’s new car registrations in January totaled 18,242, an increase of 165% from the previous year.
BYD also more than doubled its overall market share in the region, reaching 1.9% last month from 0.7% in January 2025. Tariffs, including China’s 100% tax on EVs, have largely shut the company out of the United States.
Michael Field, chief equity strategist at Morningstar, said one of the main problems for companies like Tesla is that Chinese automakers like BYD have an insurmountable cost advantage.
“The big question now is: ‘Will this trend continue?’ Unfortunately for European automakers and Tesla, the answer is yes,” Field told CNBC in an email.
“Even if you look five years from now, I don’t think China’s cost advantage will be completely broken because labor costs are structurally low,” he continued.
“But there is also good news that European automakers and Tesla are learning. The cost differential for battery and car production is gradually closing, and these companies are introducing more models at lower price points, which should help stem the hemorrhage of market share.”
Overall, sales in the European Union, UK and European Free Trade Association (EFTA) countries fell by 3.5% in January to 961,382 units.
Gasoline vehicle registrations in January decreased by about 26% from the same month last year, but battery electric vehicles, plug-in hybrid vehicles, and hybrid electric vehicles increased by nearly 14%, 32%, and 6%, respectively.
