Elon Musk Attributes Tesla’s Sales Decline to the “Quite Weak” European Car Market, Yet New Data Continues to Disprove His Claims

Please note that this content is not intended as investment advice. The author holds no investments in the stocks referenced herein.

The Shifting Landscape of Tesla: From Electric Vehicles to AI and Robotics

For Tesla and its CEO Elon Musk, the ongoing struggles with declining sales underscore a challenging period. The company’s anticipated shift from being predominantly an electric vehicle (EV) manufacturer to a more comprehensive player in artificial intelligence (AI) and robotics is a strategic move that may provide much-needed growth and market confidence. This transformation is not just about enhancing Tesla’s valuation; it also aims to mitigate any reputational damage incurred during Musk’s brief engagement with political issues.

Musk’s Remarks on Sales Trends

At the recent Qatar Economic Forum, Musk addressed concerns regarding Tesla’s lagging sales, particularly in Europe. He stated:

“That’s true of all manufacturers. There’s no exceptions.”

He further commented:

“The European car market is quite weak.”

However, contrary data contradicts Musk’s claims. For instance, April witnessed a remarkable 28% increase in overall EV sales across Europe—setting a new monthly high—yet Tesla’s sales plummeted by 49% in the same timeframe.

Sales Dips in Key Markets

This troubling trend appears to have persisted into May. In the UK, the market for battery electric vehicles (BEVs) rose by 28%, while Tesla saw its sales plummet by 45% year-over-year, with only 1, 758 units sold.

Germany reported 1, 210 Tesla sales and 0.5% market share in May. BEV penetration is 18% and Tesla has 2.8% of this segment.🇩🇪

• -36% vs. May last year • Last three months -34.6% vs. December – February • Year-to-date -58% over same period last year • Year-to-date is 19% or… pic.twitter.com/3j1OEyAjue

— Roland Pircher (@piloly) June 4, 2025

In Germany, where Musk’s political support for the far-right AfD party has provoked considerable backlash, Tesla recorded only 1, 210 sales in May. This figure represents a 36% decrease compared to the same month last year, while the overall BEV market in Germany surged by 44.9% during the same period.

Future Sales Projections

Looking ahead, analysts on Wall Street are bracing for further declines, forecasting a 7% decrease in Tesla’s sales in the second quarter of 2025 and an overall 5% drop for the fiscal year.

A New Direction for Tesla

To counteract this negative trend, Musk is attempting to reshape the narrative surrounding Tesla, aiming to position the company primarily as an AI and robotics powerhouse—where EV manufacturing takes a back seat.

In line with this vision, Tesla is preparing to introduce its unsupervised Full Self-Driving (FSD) technology on the Model Y in Austin, Texas, next week, alongside the rollout of 10 to 20 new robotaxis. The company’s objective is to expand this service to multiple U. S.cities by the end of 2025.

Furthermore, Adam Jonas of Morgan Stanley has speculated on Tesla’s potential role in the drone and eVTOL markets by 2050. Although there are no formal announcements about drone manufacturing, Jonas believes Tesla possesses essential skills that could make it a significant player in the “Low Altitude Economy.”

He suggests that a single eVTOL could generate revenue comparable to that of fifteen standard ride-sharing vehicles, which translates into a substantial valuation potential for Tesla—projected to range anywhere from $100 to $1, 000 per share.

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