New Tesla car registrations in Europe fell 17% in January compared to the same period last year. It is the 13th consecutive month that sales for the company founded by Elon Musk have fallen across the continent. At the opposite pole, the Chinese giant BYD has doubled its market share in the European Union and the European Economic Area, reports the American publication CNBC.
Data released on Tuesday by the European Association of Automobile Manufacturers showed that 8,075 new Tesla cars were registered in January 2026, down 17% from January 2025.
Tesla's market share in the European Union, Great Britain, Switzerland, Norway and Iceland fell to 0.8 percent, down from 1 percent in the same month last year.
It's another “very weak” start to the year for Elon Musk's company, Rico Luman, senior transport and logistics economist at Dutch bank ING, told CNBC.
What are the reasons
“Tesla's image has deteriorated in Europe over the past year, and people now have a lot more choice with a range of new and affordable electric vehicles (including those from BYD and others such as MG and ZEEKR) entering the market, while Tesla has no new models,” he added.
Tesla's push to develop autonomous driving, rather than introducing new vehicles and expanding its lineup of production models, is likely a big factor, Luman said.
“Another aspect in Europe is that a large number of first-generation Teslas are being resold at the moment (after being leased for 4-6 years), which has led to lower second-hand prices,” Luman said, adding that there is an abundance of competitively priced Teslas on the second-hand market.
Tesla has faced numerous challenges in Europe, including fierce competition, particularly from Chinese car brands. The company has also struggled to recover from damage to its reputation from Musk's rhetoric and close relationship with the Trump administration after the US president returned to power in January 2025.
Musk spent nearly $300 million to help US President Donald Trump get elected to a second term and subsequently led a tumultuous initiative to cut federal agencies. Protests erupted at Tesla dealerships across Europe. Musk's relationship with Trump later cooled following a bitter online spat with the US president.
The rise of Chinese companies
Chinese giant BYD continued rapid growth in Europe in early 2026, according to ACEA data. The company's new car registrations rose 165% year-on-year to 18,242 in January.
BYD also doubled its market share in the region to 1.9 percent last month from 0.7 percent in January 2025. Tariffs, including a 100 percent tax on Chinese electric vehicles, have largely kept the company out of the US.
Michael Field, chief 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?'” The answer, unfortunately for European automakers and Tesla, is yes, Field told CNBC.
“Even looking out over a 5-year period, we don't think the cost advantage will be completely eliminated because of lower structural labor costs in China,” he continued.
Overall, sales in the European Union, Great Britain and the European Free Trade Association (EFTA) countries fell by 3.5% to 961,382 cars in January.
Gasoline car registrations were down about 26% year-over-year in January, while battery electric, plug-in hybrid and electric hybrid cars were up nearly 14%, 32% and 6% respectively.
