Tesla is losing Europe, but Wall Street doesn’t seem to care
Tesla (TSLA) losing its electric-vehicle crown to Chinese rival BYD is bad enough, but new data out of Europe suggests Elon Musk’s automaker may be facing a much deeper problem.
According to data compiled by Electrek, a U.S.-based publication that tracks electric vehicle sales and industry trends, Tesla’s European sales fell sharply across most major markets in 2025, with Norway standing out as the lone exception.
Sales plunged 66.9% in Sweden, 53.1% in Belgium, 48.4% in Germany, 44.5% in the Netherlands, and 37.5% in France, underscoring the scale of the slowdown across the region.
Even Norway’s relative resilience may prove short-lived. As Electrek’s chief editor, Fred Lambert, noted, Tesla recently lost key incentives in the country, raising questions about whether its sales momentum there can be sustained.
Taken together, the data points to mounting pressure on Tesla’s European business at a time when competition is accelerating and when investor confidence in the company’s growth story is already under strain.
Factors behind the sales slowdown
Tesla’s challenges have been well documented. Competition has intensified as pure-play electric vehicle makers such as BYD expand globally and legacy automakers accelerate their own EV rollouts, often offering a wider range of models at lower price points.
At the same time, the expiration of tax incentives in key markets, including the United States, combined with an aging vehicle lineup, has reduced Tesla’s appeal relative to newer and more aggressively priced alternatives.
There is also growing debate over how much of the slowdown may be tied to political backlash surrounding Elon Musk.
As InvestorsObserver reported, there were signs last year that Musk’s visible involvement with the Trump White House was alienating a segment of Tesla’s historically progressive customer base.
Professional investors, meanwhile, have increasingly diversified away from Tesla amid concerns that Musk has been stretched thin across multiple ventures, raising questions about his level of focus on the automaker during a critical period of competition and transition.
TSLA shares shrug off the turmoil
Perhaps the most striking part of the story is that Tesla shares have pushed to new all-time highs even as the company’s electric vehicle market share has eroded. The divergence underscores a growing disconnect between market valuations and underlying business momentum.
In the run-up to Christmas, Tesla shares climbed close to $500. While the stock has since pulled back, it continues to trade above $440 a share, giving the company a market capitalization of roughly $1.4 trillion.
The resilience of Tesla’s stock suggests investors are prioritizing broader narratives and future optionality over near-term pressures in the company’s core EV business.