Tesla’s (TSLA) electric vehicle sales in Europe fell sharply in February to trail behind legacy automakers like Volkswagen (VWAGY), BMW (BAMXF), and rising competitors from China, according to data from JATO Dynamics. The drop is the result of political controversy, as CEO Elon Musk has publicly supported far-right European parties through posts on his social platform X. This, combined with rising competition and the ongoing phaseout of the current Model Y, has caused Tesla’s performance in the region to take a hit.
JATO analyst Felipe Munoz pointed out that Tesla’s smaller model lineup makes it more vulnerable during vehicle transitions. In February, Tesla registered fewer than 16,000 battery-electric vehicles (BEVs) across 29 European markets — a 44% year-over-year drop. That pulled its market share down to 9.6%, which was the lowest February level in five years. In contrast, Volkswagen’s BEV sales jumped by 180% to nearly 20,000, while BMW and its Mini brand sold nearly 19,000.
Chinese automakers also made solid progress. In fact, BYD (BYDDF) and Polestar (PSNY) saw their BEV sales grow by 94% and 84%, respectively, with Xpeng (XPEV) and Leapmotor also increasing their presence. However, Geely-owned Volvo (VLVLY) and SAIC-owned MG saw BEV sales decline by 30% and 67%. Despite an overall 3% drop in total car sales across the region, BEV registrations were up 25%, which highlights the strong demand for electric vehicles even as Tesla’s lead slips.
Is Tesla a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 14 Buys, 11 Holds, and 11 Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average TSLA price target of $335.32 per share implies 23.1% upside potential.
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