While CEO Elon Musk continues to champion a future of autonomous robotaxis, the company’s core automotive business is facing a severe contraction across Europe. Plummeting sales figures and relentless competition from Chinese manufacturers are painting a troubling picture for the electric vehicle pioneer. The situation has drawn commentary from notable market skeptics, raising questions about whether this is a temporary setback or a sign of deeper structural issues.
A Stark Warning from a Notable Short-Seller
Adding to the market’s concerns, Michael Burry of “The Big Short” fame has recently issued a scathing critique of Tesla’s valuation. He labeled the equity as “ridiculously overvalued,” pointing to significant share dilution and Musk’s substantial compensation package. This skepticism is reflected in the market; with shares currently trading at €383.35, the stock sits approximately 16% below its 52-week high.
European Sales in Precipitous Decline
Newly released registration data for November reveals a broad-based downturn. The situation is particularly acute in Germany, a crucial European market, where Tesla’s sales dropped by over 20%. The year-to-date picture (January through November) is even more dramatic, showing German registrations have collapsed by nearly half.
The decline is not isolated. In the United Kingdom, new registrations fell by 19% during the same period. Other major European markets, including France, Sweden, and the Netherlands, are reporting double-digit percentage decreases, with some declines approaching 60%.
Should investors sell immediately? Or is it worth buying Tesla?
Analysts point to a two-pronged challenge. First, more affordable competitors like China’s BYD are gaining formidable ground. In a symbolic shift, BYD sold more vehicles than Tesla in Germany during November, and its UK registrations tripled year-over-year. Second, Tesla’s brand perception appears to be suffering. Surveys indicate many European consumers no longer view the marque as uniquely innovative. Furthermore, Musk’s political commentary has generated backlash, prompting announced boycotts from companies such as Rossmann.
A Misleading Norwegian Anomaly and a Chinese Silver Lining
One European nation stands in stark contrast: Norway. The market there saw an explosive 175% surge in Tesla registrations. However, this spike is widely regarded as an artificial distortion. It is primarily driven by consumers rushing to beat impending tax changes set for 2026, which will eliminate benefits for expensive electric vehicles. Once this pull-forward effect subsides, a sharp correction is anticipated.
A modest positive note comes from China, where updated model variants helped push November sales up by nearly 10%. Yet, this incremental gain in a single market does little to offset the overwhelming losses seen across Europe.
The Long Road to Diversification
Tesla’s energy storage division continues to expand with robust margins, and its robotaxi service network in the U.S. is growing. Nonetheless, industry observers caution that it will likely take years for these emerging segments to generate sufficient revenue to compensate for the rapid erosion of automotive sales in Europe. The company’s immediate future appears heavily dependent on reversing its fortunes in a key regional market where competitive and reputational pressures are intensifying.
Ad
Tesla Stock: Buy or Sell?! New Tesla Analysis from December 4 delivers the answer:
The latest Tesla figures speak for themselves: Urgent action needed for Tesla investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from December 4.
Tesla: Buy or sell? Read more here...
