Tesla is getting some more good news from the key region

For Tesla, 2025 was a year to forget.

Yes, the company finally launched its Tesla robotaxis service after years of promises (though two dozen on the road are a far cry from the promised millions), but it also suffered a reputational blow that many felt it would never be able to fix.

• china: 6.4 million EVs sold

• Europe: 2.2 million EVs sold

• America: 1.2 million EVs sold

• rest of the world: 1 million EVs sold
  Source: International Energy Agency

2025 is the second consecutive year in which Tesla delivered fewer cars than the previous year. Tesla has delivered 1.79 million vehicles in 2024 while producing 1.77 million. In 2023, the company delivered 1.81 million vehicles and produced 1.85 million.

While the company doesn’t break down its sales by region, there is evidence that the company’s declines were caused by poor locations in China and Europe, two of the world’s largest electric vehicle markets.

The company reported declining sales across Europe for most of 2025, driven by several issues, including CEO Elon Musk’s increased involvement in politics.

Musk has publicly supported Germany’s far-right AfD party, which some consider extremist, and he has been accused of giving Nazi salutes on stage.

Tesla sales in Europe fell nearly 40% from January to April 2025 compared to the same period last year. In June, sales fell another 39%. Tesla’s first-half sales in Europe fell 44%, according to the European Automobile Manufacturers Association (ACEA).

The trend followed across the continent in the second half of 2025, including in the UK, where registrations fell by more than 29% in December, according to Reuters.

As Tesla reached the end of 2025 in Europe, it has since shown signs of life in many countries in the region.

Year over year, Tesla registrations in France rose 55% in February, Spain 74%, and Norway 32%, Reuters reported. Tesla doubled its sales in Portugal as registrations rose 112%. But it wasn’t all good news for Tesla in the region.

Related: Tesla Loses Critical Autopilot Rule That Could Cost Hundreds of Millions

New car registrations in Italy fell by nearly 7% and in Denmark by nearly 18%. Registrations in the Netherlands are down 45%.

2025 was Tesla’s second consecutive year of declines on the European continent. Last year, they fell 27%, despite the company introducing new, cheaper versions of its top-selling Model Y and Model 3.

Tesla’s market share in the EU, UK and European Free Trade Association fell to 0.8% in January, with 1.8% market share in 2025, 2.5% market share in 2024, and 2.9% market share the year before that.

New car registrations fell 3.9% year-over-year, but battery-electric car market share reached 19.3%, according to ACEA, a significant increase from 14.9% a year ago.

France, Germany, Belgium, and the Netherlands alone account for 60% of European EV sales, and results are mixed.

France and Germany saw registration gains of 52% and 24%, respectively, while Belgium and the Netherlands experienced declines of 11.5% and 35.4%, respectively.

While Tesla CEO Elon Musk thinks of the company as more than just an electric car maker, more than 90% of Tesla’s revenue comes from cars.

Still, after years of not selling the Model S and Model X, Tesla announced earlier this month that it was discontinuing them.

Even analysts see Tesla’s development of software as the company’s struggling auto business.

“While Tesla’s auto business may underperform in 2026, we think the company’s robotics development and human development efforts are paying more attention,” Deutsche Bank analysts said in a recent note.

“To the extent that the macro regime does not change materially, we think investors will look beyond weakness in the auto business.”

Tesla’s operating income fell dramatically in 2025 from $7.76 billion in 2024 to $4.86 billion, and its gross profit fell from $17.4 billion to $16.2 billion.

Related: The look of the new Tesla almost seems too good to be true

This story was originally published by The Street on March 2, 2026, where it first appeared in the Automotive section. Add TheStreet as a Favorite Source by clicking here.