Tesla shares fell more than 4% on Thursday after new data from Europe showed a continuing sales slump for the automaker, despite strong demand for fully electric vehicles in the region. According to the European Automobile Manufacturers’ Association (ACEA), Tesla EV registrations in Europe, a key proxy for sales, fell by about 23% year-over-year in August, with 14,831 registrations down from 19,136 in August 2024. In the first eight months of this year, Tesla’s EV registrations in Europe declined by 32.6%. In contrast, total EV registrations throughout the region rose by around 26% during the same period, while registrations for petrol and diesel-powered vehicles dropped by more than 20%.
Political Activism and Brand Image
The sales slump comes as Tesla CEO Elon Musk’s political activism continues to hurt the brand and dampen its appeal to prospective EV buyers. Earlier this year, Musk endorsed Germany’s far-right AfD party, and this month he appeared by video at an anti-immigrant rally in the U.K. that turned violent and left 26 police officers injured. At the rally, led by a convicted fraudster, Musk told attendees, “violence is coming to you” and “you either fight back or you die.” British Prime Minister Keir Starmer rebuked Musk for his “dangerous” comments at the event.
Looking Ahead to New Models
Despite Thursday’s slide, Tesla’s stock has bounced back from a difficult start to the year and is now up 5% in 2025 after plunging 36% in the first quarter. RBC analysts wrote in a note that they expect Tesla’s total deliveries for the third quarter could reach 456,000, which is above the industry consensus. This is partly due to a rush by consumers to buy EVs in the U.S. before a $7,500 federal tax credit expires at the end of September. To revitalize interest in the brand, Tesla has said that a new, more affordable model is in the works, which could help it fend off increased competition from rivals like Volkswagen and BYD that have been gaining market share.
What The Author Thinks
The sales slump in Europe and the negative political backlash are a clear sign of the growing cost of Elon Musk’s public persona. While Musk’s political activism may energize some, it is clearly alienating a significant portion of the consumer base, particularly in politically liberal markets like Europe. For a brand that relies on a clean, aspirational image, the controversies surrounding its CEO are creating a brand liability that is becoming increasingly difficult to ignore. The challenge for Tesla is to maintain its market dominance in a world where a CEO’s personal brand is inextricably linked to the company’s public perception, and it shows that a controversial public figure can have a tangible negative impact on a company’s bottom line.
Featured image credit: Vitya_maly via GoodFon
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