^{Photo: The New York Times}

Tesla Faces Steep Decline in German Market

Tesla’s electric vehicle sales in Germany tumbled dramatically in October, with deliveries falling to 750 units, less than half the 1,607 vehicles sold during the same month in 2024. Year-to-date, Tesla’s total EV sales in the country are down 50%, with only 15,595 units delivered compared to the prior year, according to the Kraftfahrt-Bundesamt (KBA).

Despite this drop, the German EV market overall continues to grow. Battery electric vehicle sales reached 52,425 units in October, capturing 21% of total new car sales. Total EV deliveries in Germany so far this year hit 434,627 units, marking nearly a 40% increase from 2024, demonstrating strong demand for electric mobility in the country.

New Affordable Model Y Launch

Tesla introduced a lower-cost version of the Model Y SUV in Germany last month, priced at €39,990, roughly €5,000 cheaper than previous entry-level versions. The company hopes this price adjustment can attract budget-conscious buyers and help regain lost market share amid intense competition.

European rivals such as Volkswagen, BMW, and Chinese EV makers offer smaller, more affordable models often priced below €35,000, making the German EV landscape fiercely competitive. Analysts note that Tesla’s premium positioning may limit its appeal in a market that increasingly values cost-effective options.

Impact of Elon Musk’s Political Stance

Tesla’s struggle in Germany is not solely a pricing issue. CEO Elon Musk’s public endorsements and political commentary, including support for Germany’s far-right AfD party, have reportedly alienated left-leaning consumers, historically a strong segment for EV adoption. This reputational factor has likely contributed to declining sales at a time when competitors are aggressively expanding their offerings.

German EV Policy Changes Could Boost Demand

Policy shifts may offer relief for Tesla and other EV makers. Germany had phased out incentives for fully electric vehicles about two years ago, contributing to slower adoption. However, a new government EV incentive program launching in January 2026 aims to support lower- and middle-income buyers, potentially stimulating demand across the market.

The success of Tesla’s new, lower-priced Model Y variants, combined with upcoming government incentives, will be critical in determining whether the automaker can regain its foothold in Germany and broader European markets.