Tesla Sales Are Down 43 Percent In Europe As Elon Musk Scares Off Customers

Good morning! It's Tuesday, March 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 checking out Tesla's dismal vehicle sales in Europe as well as how much Hyundai is willing to spend to get around U.S. tariffs. We're also going to check out what Tesla's chairperson didn't say when she was asked about CEO Elon Musk's focus on the automaker and Volkswagen's new partnership for driver assistance systems.

It's another busy day in the world of cars. Let's all lock in.

Tesla's market share in Europe continued to shrink in February, as sales from the Austin, Texas-based automaker for a second month. That news comes despite the fact that overall EV registrations were up 26.1 percent throughout the continent. The company, led by outspoken CEO Elon Musk, has seen sales drop 42.6 percent in Europe so far this year. I'm not an expert, but that isn't what you want to see.

Tesla took home 1.8% of the total new car market in Europe in February and 10.3% of the EV market. Both of those are pretty solid numbers, but it's a disaster when you compare it to the same time a year ago. Back then, Tesla had 2.8% of the total market and 21.6% of the EV market.

There are two main reasons for this fairly disastrous downturn: a mediocre lineup and a strong distaste for what Musk stands for these days. From Reuters:

Tesla currently faces a number of challenges in Europe, ahead of the launch of its new Model Y mid-size SUV this month. The EV maker has a smaller, aging lineup while traditional automaker rivals and new Chinese entrants alike continue to launch new, often cheaper electric models.

Musk, the company's CEO, has also stirred controversy by courting far-right parties in Europe, which has added to Tesla's sales slump.

Overall, new car sales dropped 3.4% in Europe in February, but BEV sales were up 23.7%, and hybrid sales rose 19%. BEVs, hybrids and plug-in hybrids accounted for 58.4% of the EU's car sales in February — a 10.2% increase over the same time last year.

Hyundai says it will spend $6 billion to set up a steel mill in Louisiana that'll be capable of producing 2.7 million tons of steel each year. Those are both some very big numbers. The plant, which Hyundai Steel will operate, is set to supply cars and parts to plants in the U.S. It's part of a wider $21 billion investment plan the company plans to see through over the next four years, in an effort to expand annual production capacity to 1.2 million vehicles. Currently, it has the capacity for about 1 million vehicles.

The Korean automaker also plans to invest in energy infrastructure creation and partner with U.S. companies like Nvidia and Waymo on technology development. President Trump made the announcement on March 24 at the White House surrounded by Hyundai executives. From Automotive News:

Trump confirmed that Hyundai Motor Group — parent to Hyundai, Genesis and Kia — would not be required to pay tariffs as a result of the expansion. He said the investment was a "clear demonstration that tariffs very strongly work."

[Executive Chairman] Euisun Chung called the $6 billion investment in the Hyundai Steel mill a "key part of this commitment" and said the Louisiana facility would create 1,300 jobs.

There's a free-trade agreement in place between the U.S. and South Korea right now, but Trump signaled that he was going to impose reciprocal tariffs on countries that tax goods made in the U.S.

Tesla Chair Robyn Denholm dodged questions regarding CEO Elon Musk's need to spend more time at his car company, as its sales and share prices continue to dip. Musk, of course, has been busy taking a pickaxe to the federal government when he's not busy sending alt-right conspiracy tweets. From Bloomberg:

Denholm, who spoke at a financial services conference in Melbourne on Tuesday, said nothing when asked if she was concerned about Musk's apparent right-wing allegiances, or his opposition to diversity and inclusion initiatives. Asked if she had a message for Tesla shareholders, she didn't respond. A woman accompanying Denholm as she entered the conference venue said they wouldn't comment or respond to any questions.

Musk's extremely hands-on role in the federal government is fueling concerns that he's deeply overstretched and doesn't have enough time to manage Tesla. Hell, that was a concern folks had before he was pretty much running the federal government. In an interview with Fox Business earlier this month, Musk apparently said he was having "great difficulty" running his other businesses while being in charge of DOGE. 

Denholm's ability to influence or control Musk has been debated for quite a while now, according to Bloomberg. The Australian executive doesn't really talk about her role at Tesla in public, and she almost never answers specific questions about the company or how she oversees the CEO. 

A judge in the U.S. ruled in 2024 that she lacked independence on the board because she owed most of her wealth to her service as a director at Tesla. In 2021 and 2022 she made $280 million by exercising Tesla options. Yeah, I'd say that might cloud her independence at the company.

Volkswagen is set to start working with Valeo and Mobileye to enhance its driver assist systems in upcoming gas-powered vehicles on its MQB platform. Don't expect any wild hands-free driving tech to come out of the partnership, though. The cooperation is expected to top out with advanced Level 2 capabilities.

The trio of companies are referring to the upcoming tech as "Level 2 Plus," which is a term Mobileye conjured up in 2018 for L2 systems with vehicles that have a better understanding of their path ahead. The ADAS system in these VWs will be based on a 360-degree ring of camera and radar sensors on the vehicle. From Automotive News:

In addition to hands-free driving on highways, features will include low-speed traffic jam piloting, parking assistance, driver alertness monitoring and, in the future, augmented-reality displays, the companies said.

Valeo will provide electronic control units, sensors and software for parking applications, while Mobileye will contribute its Surround ADAS platform, including processors and mapping technology. That platform replaces multiple ECUs with a central computer, allowing over-the-air updates, the companies said.

Right now, it's not totally clear what MQB models the system would be available on, but if it can be put into MQB, that means we'll see it in gas cars as well as mild- and plug-in hybrids. 

These days, David Byrne is a bike activist, but that doesn't mean he lacks good taste in cars. The Talking Heads frontman once owned a Citroen which he drove in LA, according to KCRW. 

It's not unfair to say that car enthusiasts can be skeptical about three-wheelers. Still, even enthusiasts may not have heard of this import oddity.