(Bloomberg) -- Tesla Inc.’s sales plummeted 59% last month in Germany, adding to indications that Chief Executive Officer’s Elon Musk political activities are hurting the carmaker’s business in major electric vehicle markets.
The US manufacturer registered only 1,277 new cars in January, its lowest monthly total since July 2021, according to the German Federal Motor Transport Authority.
Tesla lost substantial ground in an EV market that was up 54% for the month. Musk’s intervention in Germany’s upcoming federal election likely factored in the result — a poll taken in mid-January found the CEO was viewed unfavorably, and that his political interventions were unwelcome.
Tesla also posted declines in France and the UK last month, meaning its sales fell in Europe’s three largest EV markets. In addition to vouching for Germany’s far-right Alternative for Germany party and taking on UK Prime Minister Keir Starmer, Musk spent the month cementing his position in the administration of US President Donald Trump, who’s threatened to hit the European Union with tariffs.
The company’s sales plunged 63% last month in France — the EU’s second-biggest EV market, after Germany — and dropped 12% in the UK. Tesla shares traded down as much as 3.1% as of 12:15 p.m. Wednesday in New York.
AfD Support
Musk, 53, hosted a live discussion with AfD leader Alice Weidel on his social media site X on Jan. 9, giving a platform to the co-chair of a party that’s opposed Tesla’s construction of a plant outside Berlin and taken a dim view on renewable energy.
During a virtual appearance at an AfD rally later in January, the Tesla CEO urged Germans to be proud of their culture and, in an apparent reference to wartime atrocities under the Nazis, discouraged “too much focus on past guilt.”
The remarks — made just before the 80th anniversary of the liberation of the Auschwitz death camp — sparked outrage in a country where reckoning with the past is central to its postwar identity.
Other factors outside of politics are likely at play in Tesla’s slow start to the year. The company is changing over assembly plants to produce a redesigned Model Y, its best-selling vehicle, which will cost the manufacturer several weeks of lost production.
Tesla also may be contending with shortages of inventory in some markets due to the all-out push the company made to boost sales late last year.
While the automaker delivered more vehicles than ever in the fourth quarter, it fell short of a forecast for slight growth for the full year. Instead, the company posted its first annual decline in more than a decade.
California Weakness
But there have been more signs outside of Europe that Musk’s politics are having an effect on the carmaker he runs. Tesla registered fewer cars in California in all four quarters of 2024, as sales of its second-most important vehicle — the Model 3 — plunged 36% for the year.
California went for Trump’s opponent Kamala Harris by a wide margin in November, and Musk feuded with Governor Gavin Newsom throughout last year.
In Germany and across the EU, Tesla’s competitors including Volkswagen AG, Stellantis NV and Renault SA are under pressure to sell more EVs in order to meet tougher pollution standards taking effect this year. VW and BMW AG were among manufacturers that gained share in Germany’s EV market last year, while Tesla lost ground.
In addition to having to contend with those more concerted efforts from makers of combustion cars, Musk will face off with rival EV brands looking to seize on his divisive politicking.
“We get a lot of people writing that they don’t like all this,” Polestar CEO Michael Lohscheller told Bloomberg News in an interview last month. The German national called Musk’s endorsement of the AfD “totally unacceptable” and said he’s told salespeople to target disgruntled Tesla owners for potential business.
(Updates with polling starting in the third paragraph, more background after last chart.)
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