Renault, Volkswagen, and Chinese EVs swoop in as Tesla's Europe sales slump

A growing number of motorists across Europe are making the switch from Tesla to alternative companies as CEO Elon Musk vows to take a step back from his political role.

The first quarter of 2025 has been a difficult time for Tesla, with the company reporting a 71% drop in profits and the biggest decline in sales since 2012.

Mike Thompson, COO of Leasing Options, noted that one of the most significant reasons for the declines is due to Elon Musk's role as leader of the Department of Government Efficiency (DOGE) under President Trump.

He explained: "Tesla has always been as much about brand image as it has been about technology. However, growing controversy around Elon Musk - both in his leadership of Tesla and his wider public persona - is alienating consumers.

"His outspoken political views, erratic decision-making, and controversial social media activity have led some former fans to distance themselves from the brand. People are re-evaluating their options and right now, Tesla isn’t the automatic first choice it once was."

Since the introduction of their first family production car, the Model S, in 2012, Tesla has been one of the world's leading electric vehicle manufacturers. However, company CEO Elon Musk's political roles and connections to the Trump Administration have divided the opinions of car buyers, particularly in Europe.

In Germany, Tesla's most important European market, sales fell by 70 percent during February 2025, with other markets in the continent experiencing similar declines.

However, whilst sales of Teslas are falling, demand for electric vehicles significantly increased during the first months of 2025 in many key European markets.

During January 2025, Europe's best-selling electric model was the Volkswagen ID.4 - a German-made SUV with a wide range of customisation options and a maximum range of 340 miles per charge.

Other models in the Volkswagen range were also particularly popular throughout Europe, including the ID.7 Fastback and the ID.3 - currently the brand's most affordable model, with prices starting at £30,860.

Volkswagen has also announced plans to introduce a number of more affordable electric models, including the ID.1 - a Dacia Spring-like city car with a starting price of under €20,000 (£17,000).

Whilst Volkswagen had the best-selling electric model during the first month of the year, other traditional European brands also ranked highly throughout the continent.

The Renault 5 E-Tech was recently ranked European Car of the Year 2025, thanks in part to its stylish appearance, good levels of standard equipment, and an accessible price of £22,995.

However, Chinese car brands have also experienced a boom in popularity during the first months of the year, with BYD's global sales rising 60 percent during the first quarter of 2025 and brands like JAECOO, Leapmotor, and XPeng all entering the market with advanced yet affordable models.