European Tesla Sales Fall 45 Percent Thanks To Elon Musk

Good morning! It's Tuesday, February 25, 2025, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. This is where you'll find the most important stories that are shaping the way Americans drive and get around.

In this morning's edition, we're taking a look at how Elon Musk's political meddling is driving down Tesla sales in Europe, and how Aston Martin's CEO plans to turn the automaker around by cutting costs. We'll also talk about the National Highway Traffic Safety Administration laying off a small-ish chunk of its workforce, and how Tesla launched a "city navigation" Autopilot update in China.

Tesla's sales in Europe dropped an astonishing 45 percent in January as other automakers saw a surge in electric vehicle demand. The reason for this catastrophic drop is both unsurprising and simple: CEO Elon Musk and his political antics. Because of him, Tesla sold just 9,945 cars across Europe in January. That's down from 18,161 vehicles just a year ago. At the same time, overall EV sales rose 37 percent on the continent.

Tesla registered just 1,277 new vehicles in Germany last month. It's the Austin, Texas-based automaker's lowest monthly total since July of 2021. French sales fared even worse than most, dropping 63 percent to their lowest numbers since August of 2022. Yikes. Tesla also registered vehicle vehicles than China's BYD for the first time ever in the UK. Its sales dropped almost eight percent in a market that was otherwise up 42 percent in January.

Of course, a drop like this isn't entirely because of Musk. Tesla also had to switch over production lines for its most popular vehicle, the Model Y crossover. That means Tesla couldn't get any many Model Ys out the door as it usually would. Still, Musk's cozying up to far-right political leaders as well as being Donald Trump's biggest donor and one of his closest advisors, has hurt Tesla's reputation globally. From Bloomberg:

In addition to barraging leaders in Germany and the UK, Musk has joined Trump in disparaging Ukraine's Volodymyr Zelenskiy and disputing polls that have found the president maintains support of the country's people. In response to Trump's criticisms, Zelenskiy said last week the US president had fallen victim to Russian "disinformation."

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YouGov conducted polls in Germany and the UK in mid-January that found Musk was viewed unfavorably and that his meddling in the countries' politics was unwelcome. The Tesla CEO hosted a live discussion with Alternative for Germany party leader Alice Weidel on his social media site X on Jan. 9 in an attempt to boost the anti-immigration, pro-Russian party that finished second in this week's election.

During a virtual appearance at an AfD rally later in January, Musk urged Germans to be proud of their culture and discouraged "too much focus on past guilt." The comments touched a nerve just before the 80th anniversary of the liberation of the Auschwitz death camp.

Musk also called for the imprisonment of UK Prime Minister Keir Starmer last month while advocating for the release of jailed far-right activists.

Some of this nasty downturn for Tesla can be traced to issues the company is dealing with outside of Musk.

Tesla likely was dealing with shortages of inventory in some markets due to the all-out push the company made to boost sales late last year. Changing over assembly lines for the Model Y also may have had an effect on its January registrations.

Chief Financial Officer Vaibhav Taneja warned during last month's quarterly earnings call that the transition to a new design for the model first introduced in 2020 would cost the manufacturer several weeks of lost production. The company builds the Model Y at four plants globally, including at its factory outside Berlin.

The competition — led in Europe by Volkswagen AG, Stellantis NV and Renault SA — also is under greater regulatory pressure to sell more EVs in 2025. Manufacturers must meet stricter CO2 emissions targets in the European Union this year, while a steadily rising share of their sales need to be zero-emission in the UK through 2035.

It's too early to say how much of an issue Musk's rhetoric and insistence on being a bastard will be for Tesla, but I feel it could end up having some real, long-term effects on people's perception of the automaker. None of that will be good, either.

Aston Martin is in a tough spot right now. At this point, it has struggled with profitability for years as its stock price continues to drop along with sales. Now, executive chairman Lawrence Stroll is letting CEO Adrian Hallmark take the reins in an attempt to turn around the embattled British automaker. Doing that will be no small feat, and it's going to involve production slashes and cost-cutting. From Bloomberg:  

Hallmark wants to trim production to avoid wasting money making cars that sit unsold, people with knowledge of the company's plans said. The CEO has already said he wants to reduce Aston Martin's delivery target to around 8,000 vehicles per year, from Stroll's stated ambition of 10,000. This is all about boosting margins, as Hallmark flagged to analysts in October: "The bottom line — cash and profit — are what we're going to be obsessively focused on, not volume first."

The company will also try to fix perennial problems in its supply chain, the people said, explaining that Aston Martin has often picked cheap suppliers for parts who then fail to deliver on time, leaving the company paying more than expected to fix issues.

Aston Martin isn't planning to launch any new models in the near future — to save money on development costs — and will instead try to launch more derivatives of its existing models, something that Lamborghini, Porsche and Bentley have successfully done, the people said. At Bentley, Hallmark oversaw a strategy of offering customers the opportunity to customize their vehicles. In 2023, the last full year he was in charge, more than 70% of Bentley's cars were fitted out with add-ons like special trim.

Investors and analysts have remained remarkably bullish on Aston Martin. Stroll has on several occasions denied that the company needed more cash, only to then raise another round. The company would be cash-flow positive from the second half of 2024 "and forever," he told journalists at an event last April. It wasn't.

"The stock is being bitten and is going to continue being bitten until they can prove they can sustainably generate positive free cash flow," said Giacomo Reghelin, an analyst at Bloomberg Intelligence. "Until that happens, there is always the risk that they might need to turn to investors and raise more capital. And that's probably where the new CEO has to focus and set realistic expectations."

Stroll has said he's committed to Aston Martin for the long haul. But people familiar with the matter say that he is going against his instincts and letting Hallmark make the decisions. Gone are the weekly four-hour meetings with the CEO. In their place, a monthly meeting between the two and a couple of calls a week.

Here's hoping Aston Martin can turn it around and return to its glory days of the early-to-mid-2000s. Perhaps I look back at that time with rose-tinted glasses since those are the cars I grew up with, but Aston Martins do always look great in red.

The National Highway Traffic Safety Administration cut four percent of its staff as part of wider U.S. government downsizing efforts led by President Trump and his life partner Elon Musk. Of course, NHTSA has several pending investigations into Tesla, but I cannot imagine the layoffs are related. That would be wrong.

Luckily, NHTSA might be able to absorb these cuts more than most other government agencies. Under President Joe Biden, it grew by 30 percent to around 800 workers before the job cuts that took out 10 percent of NHTSA's staff last week. From Reuters: 

"We have retained positions critical to the mission of saving lives, preventing injuries, and reducing economic costs due to road traffic crashes," NHTSA said, adding it "will continue to enforce the law on all manufacturers of motor vehicles and equipment."

Last week, President Donald Trump's nominee to serve as the second highest ranking official at USDOT vowed the government will take a fair and objective approach to overseeing auto safety probes into Tesla.

NHTSA in October opened an investigation into 2.4 million Tesla vehicles equipped with Full Self-Driving (FSD) software after four reported collisions, including a fatal 2023 crash, among other open safety probes.

In January, NHTSA opened a separate probe into 2.6 million Tesla vehicles over reports of crashes involving a feature that allows users to move their cars remotely.

Tesla in December 2023 recalled more than two million U.S. vehicles to install new safeguards in its Autopilot advanced driver-assistance system. The agency is still investigating whether that recall is adequate to address concerns that drivers are not paying attention.

We can only hope that these are the end of the job cuts at NHTSA, an agency that does some extremely important work. However, it's impossible to say if that'll be the case, given the seemingly random nature of Musk's DOGE job cuts. Jesus Christ, that hurt to type out. We are living in the dumbest timeline imaginable. 

Tesla just added a city navigation feature to its Autopilot driver assist software in China, but it already isn't living up to the hype for many owners who fell for CEO Elon Musk's lofty promises for the software. In a notification on Tesla's app, the Austin, Texas-based automaker said capabilities include automatic lane-changing depending on speed and route, the ability to detect traffic lights at intersections and decide whether to turn. It also said an in-car camera will monitor the driver's attention. It all sounds pretty good, but the features really aren't all they're cracked up to be in China, and it costs nearly $9,000. From Reuters:

The features are similar to those available with Tesla's "Full Self-Driving" (FSD) but less advanced than what are available in the United States due to insufficient data training on Chinese roads and traffic rules, a person with direct knowledge of the matter said.

FSD is a suite of driving-assistance technologies developed with generative artificial intelligence to cope with more complicated traffic conditions whereas Autopilot handles more routine conditions.

Musk wants to bring full Autopilot and FSD systems to China but has said that the effort was proving to be tricky due to technology restrictions imposed by both the U.S. and Chinese governments. The company has postponed an initial goal of end-2024 to this year.

Several Chinese social media users said the update was a disappointment as it did not achieve the capabilities Tesla has advertised for years and said rival Chinese automakers were offering similar driver-assistance features at a lower price or for free.

Overpromising and underdelivering in China is nothing new for Tesla.

Lu Panpan, a Tesla car owner in China's eastern Zhejiang province, said he paid 56,000 yuan ($7,720) for FSD software when he bought his Long Range Model 3 in 2019 but has been frustrated by the lack of updates to its features.

"We can tell Tesla has no choice but to deliver a knowingly restricted system ... ," said Lu. "It is hard for Tesla to catch up with the smart-driving capabilities in Chinese cars, which even makes less sense given its high pricing."

This latest setback for Tesla means it's falling even further behind on self-driving tech in China, especially when compared to domestic automakers like Huawei, Xiaomi and BYD. Those companies have launched dozens of EVs with more advanced driver assistance software that are capable of navigating China's city streets.

On this date in 1779, the British surrendered Fort Sackville in Indiana, which was the first step in ending Britain's domination of our western frontier. Go west, young man. Go west. Here's more from History.com:

Eighteen days earlier, George Rogers Clark departed Kaskaskia on the Mississippi River with a force of approximately 170 men, including Kentucky militia and French volunteers. The party traveled over 200 miles of land covered by deep and icy flood water until they reached Fort Sackville at Vincennes (Indiana) on February 23, 1779. After brutally killing five captive British-allied Native Americans within view of the fort, Clark secured the surrender of the British garrison under Lieutenant-Governor Henry Hamilton at 10 a.m. on February 25.

Upon their arrival in Vincennes, French settlers, who had allied themselves with Hamilton when he took the fort in December, welcomed and provisioned Clark's forces. Inside Fort Sackville, Hamilton had only 40 British soldiers and an equal number of mixed French volunteers—French settlers fought on both sides of the American Revolution—and militia from Detroit. The French portion of Hamilton's force was reluctant to fight once they realized their compatriots had allied themselves with Clark.

Clark managed to make his 170 men seem more like 500 by unfurling flags suitable to a larger number of troops. The able woodsmen filling Clark's ranks were able to fire at a rapid rate that reinforced Hamilton's sense that he was surrounded by a substantial army. Meanwhile, Clark began tunneling under the fort with the intent of exploding the gunpowder stores within it. When a Native American raiding party attempted to return to the fort from the Ohio Valley, Clark's men killed or captured all of them. The public tomahawk executions served upon five of the captives frightened the British as to their fate in Clark's hands. Their subsequent surrender revealed British weakness to the area's Native Americans, who realized they could no longer rely on the British to protect them from the Patriots.

TAKE THAT