According to Gizmodo, Tesla’s European sales experienced catastrophic declines in October 2024, with car registrations dropping 89% in Sweden, 86% in Denmark, 31% in Spain, and 50% in Norway. This collapse occurred despite overall European EV sales growing by 119% during the same period, highlighting Tesla’s specific struggles in a booming market. The company’s sales in Sweden and the Netherlands have been declining for months, though France saw a modest 2.4% increase. Gizmodo attributes these problems to competition from Chinese EV makers and backlash against CEO Elon Musk’s political activism, including his support for abolishing parliament in the United Kingdom where Tesla has also struggled. Meanwhile, Musk is pursuing what would be the largest corporate payout in history while Tesla’s operating income decreased 40% year-over-year in Q3 2025 despite a 12% revenue increase.
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The European Consumer Revolt
What we’re witnessing in Europe represents more than just typical market fluctuations—it’s a fundamental rejection of the Tesla brand by consumers who were once its strongest advocates. European EV buyers, particularly in Scandinavia where environmental consciousness runs deep, appear to be voting with their wallets against Musk’s increasingly polarizing political stance. The timing of this collapse is particularly telling, coming just as Tesla’s brand identity shifts dramatically from its original environmentally-conscious, progressive base to something entirely different. European markets have historically valued corporate responsibility and stable leadership, and Musk’s erratic behavior and political meddling are creating exactly the kind of uncertainty that European consumers reject.
Chinese Competition Reshapes the Market
The European EV market is undergoing a fundamental transformation that Tesla appears unprepared for. Chinese manufacturers like BYD, Nio, and XPeng are flooding the market with vehicles that offer comparable technology at significantly lower price points. More importantly, these competitors are introducing newer models with fresh designs while Tesla’s core lineup has seen minimal updates. European consumers now have multiple compelling alternatives that didn’t exist just two years ago, and they’re clearly opting for vehicles from manufacturers who aren’t embroiled in political controversies. The 119% growth in overall European EV sales during Tesla’s collapse period demonstrates that the problem isn’t market demand—it’s specifically Tesla’s inability to maintain relevance in an increasingly crowded field.
The Compensation Crisis
Elon Musk’s pursuit of what would be the largest corporate payout in history creates a catastrophic optics problem at the worst possible moment. While Tesla’s board argues that retaining Musk requires extraordinary compensation, shareholders and consumers are left wondering why a CEO presiding over such dramatic sales collapses deserves unprecedented rewards. The timing creates a narrative of leadership prioritizing personal enrichment over company stability, which further erodes consumer confidence. More troubling is the 40% operating income decline despite revenue growth, suggesting Tesla is either cutting prices to move inventory or facing significantly higher costs—both scenarios that undermine the case for massive executive compensation.
U.S. Market Warning Signs
While the European collapse is dramatic, the U.S. market shows its own concerning patterns. The recent sales jump attributed to expiring EV tax credits suggests artificial demand that may not be sustainable. The 13% Q2 sales collapse preceding this temporary boost indicates underlying weakness in Tesla’s home market. More importantly, the erosion of Tesla’s traditional liberal buyer base represents a fundamental brand identity crisis. When your core customers begin actively rejecting your product due to leadership behavior, you’re facing more than a temporary sales dip—you’re facing an existential brand crisis.
Who Bears the Brunt?
The stakeholders most affected by this sales collapse extend far beyond Tesla shareholders. Tesla employees face uncertain job security as production likely needs adjustment. Suppliers who’ve invested heavily in Tesla-specific manufacturing capacity now face potential order cancellations. Most concerning are the consumers who purchased Teslas recently—they now own vehicles from a brand experiencing dramatic market rejection, which could significantly impact resale values. Meanwhile, investors watching the Q3 earnings must weigh whether this is a temporary setback or the beginning of a more permanent decline in Tesla’s market dominance.
The Path Forward
Tesla’s response to this crisis will determine whether this is a recoverable stumble or the beginning of the end of its EV dominance. The company needs immediate product refreshes beyond the Cybertruck’s niche appeal, a coherent strategy for competing with Chinese manufacturers on price and features, and most urgently, a resolution to the leadership distraction created by Musk’s compensation battle and political activities. European markets won’t wait for Tesla to sort out its internal drama—consumers are already moving to competitors who offer stability alongside innovation.
