Falling Tesla Sales Threaten a Key Revenue Stream : Elon Musk’s political interference in Europe is tanking Tesla sales — and putting at risk its revenue from the sale of credits to other automakers seeking to avoid paying penalties for failing to meet European Union emissions targets.European automakers will be hit with fines if they’re unable to cut carbon dioxide levels this year to target, but those that sell too many CO2-spewing cars can
avoid the fee by pooling with a company that’s doing better than the EU’s requirements. That’s for all-electric Tesla, a lucrative earner.The electric vehicle company has earned billions from such schemes since its founding. In 2024, it earned $2.76 billion on emissions deals, up 54 percent from the previous year, according to its annual financial earnings report.
That revenue stream is now under threat as European consumers reject the brand in the wake of Musk, a past adviser to United States President Donald Trump, throwing in his lot with far-right parties and unleashing incendiary comments about Germany abandoning its Nazi past.
Ford, Stellantis and Toyota joined a separate pool with Tesla this year, paying the American carmaker in exchange for credits.“If things go badly for Tesla, and they end up not selling enough cars this year, they may not have enough credits to cover what they promised Stellantis and the others,” said Peter Mock, managing director of the International Council on Clean Transportation. “Tesla is under pressure.”
Tesla’s fleet is already falling short of the 2025 emissions targets out of the gate, according to the ICCT, even with January EV sales having already notched a 34-percent increase in Europe.
Tesla under attack
Tesla dealerships across the continent and the U.S. have been the target of protests and vandalism; consumers are also voting with their pocket books to express their displeasure. The company’s European sales fell 50 percent in January from a year earlier, according to data from the car lobby ACEA.
That touched off a furor in Germany — and the Polish transport minister to urge a boycott of the brand — after Musk spoke at a rally for the Alternative for Germany party ahead of its Feb. 23 election. So while the overall European market for EV sales include over 50 growth in January-year-over-year, Tesla sales crashed by 60 percent.
The same pattern is also occurring in Norway and France, countries where Tesla sales decreased by 38 percent and 63 percent, respectively.New Teslas are not the only ones that are taking a beating.One in three Tesla owners who participated in the survey conducted by Dutch outlet EenVandaag said they have sold or intend to sell their Tesla in response to Musk’s remarks. “If I had known what kind of person he is now I would never have taken a Tesla,” one of the respondents said.
Most of those still driving Teslas are purchasing bumper stickers saying: “I bought this before Elon Musk went crazy.”But Tesla’s woes are not all a product of Musk becoming the face of global right-wing populists. The company also has stagnated in recent years, selling aging models while Chinese and European competitors launch more enticing cars.
“The much bigger impact on Tesla is that the models are old-fashioned,” said Lukasz Pajak, co-founder of the German used car platform Cardino. “And then obviously you have the pricing element, which is where, you know, new players on the market are far more cost-effective.