By William Gavin
Tesla saw sharp January declines in new-vehicle registrations in several European markets
Tesla's sales across the European Union, the United Kingdom and the European Free Trade Association's four countries dropped almost 29% in 2025.
Tesla shares are trading lower Monday as new figures underscore the company's sustained sales woes in Europe.
The automaker's January electric-vehicle registrations, a proxy for sales, fell 88% in Norway, 42% in France and almost 67% in the Netherlands compared with a year earlier, according to official data. January was more positive for (TSLA) in Denmark, where sales nudged up 3%, and Switzerland, where the company's registrations grew 26% compared with a year earlier.
A decline in Norway was expected after the country ended most of its incentives for EVs this year. That caused a surge of deliveries last quarter. But the results from Europe show little relief for Tesla's EV business, which has been under pressure.
Tesla's registrations across the European Union, United Kingdom and the European Free Trade Association's four countries - including Norway - dropped almost 29% in 2025, according to industry data. Sales in the E.U. alone in 2025 fell nearly 38% year-over-year, the European Automobile Manufacturers' Association said.
Tesla shares were down as much as 3.7% on Monday morning, but had pared losses and were off 2.7% around noon.
Although Tesla has made an effort to turn the tide in Europe, including by releasing cheaper versions of some cars, analysts, including Deutsche Bank's Edison Yu, don't expect material improvement this year. Global sales also fell for the company, which is trying to shift beyond its core business through a greater emphasis on artificial intelligence.
&#34;Tesla is implicitly signaling a volume decline in our view,&#34; Yu said in a note to investors last week, pointing to the company's decision to discontinue the Model S and Model X vehicles in favor of preparing to build humanoid robots.
Meanwhile, Chinese rivals, such as BYD (CN:002594), are expected to continue making inroads in Europe and target North America. Canada recently said it would allow 49,000 Chinese EVs into its market annually.
See: Why Elon Musk is making a smart move by killing off Tesla's Model S and Model X
Ford Motor Co. (F) and Xiaomi (HK:1810), which makes EVs designed to rival Tesla in China, are also exploring a joint venture to make cars in the U.S., according to the Financial Times. Both companies have denied that report, with a Ford spokesperson calling it &#34;completely false.&#34;
Last month, executives at Geely Automobile Holdings (GELHY) said that the automaker plans to eventually sell its cars in the U.S. - but not for a while. Ash Sutcliffe, Geely's global communications chief, told Autoline Network that an announcement about a U.S. expansion would likely be made within two to three years.
A potential merger between Musk's SpaceX and xAI could also be announced as soon as this week, according to Bloomberg News. Combining SpaceX and Tesla was also reportedly floated by Musk and his executives - but that could be put on the back burner.
Read: As SpaceX prepares for its IPO, Elon Musk's empire could get even more intertwined
Tesla last week said it plans to invest $2 billion in xAI, which also owns the social-media platform X. Tesla already uses xAI's Grok as a voice assistant for its cars and humanoid robots and sells Megapack batteries to the artificial-intelligence startup.
-William Gavin
This content was created by MarketWatch, which is operated by Dow Jones &amp; Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
02-02-26 1222ET

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<p>Tesla's stock fell sharply due to a nearly 29% drop in new vehicle registrations across Europe in January 2025, with significant declines in Norway, France, and the Netherlands. Despite some growth in Denmark and Switzerland, overall sales in the EU fell nearly 38% year-over-year. Analysts predict continued struggles for Tesla, especially with increasing competition from Chinese EV manufacturers. The company is also shifting focus towards artificial intelligence, discontinuing the Model S and Model X, and planning a $2 billion investment in xAI.</p>

- Tesla experienced significant declines in new-vehicle registrations across various European markets in January, with overall sales in the region dropping almost 29% in 2025.  
- Notably, registrations fell 88% in Norway, 42% in France, and nearly 67% in the Netherlands, despite some increases in Denmark and Switzerland.  
- Analysts predict continued struggles for Tesla in Europe amid stronger competition from Chinese manufacturers and an ongoing focus on artificial intelligence over traditional vehicle models.

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Tesla's stock falls as bleak new sales figures signal more pain for beleaguered EV business