Jeep Outsold Tesla In EU As Europeans Try To Toss Elon Musk Out Of The Overton Window

If there’s one market where you’d expect a historically gas-guzzling American brand like Jeep to falter, and an eco-friendly brand like Tesla to thrive, it would be Europe. And, for the last few years, you’d be mostly correct. Jeep has had mixed results in Europe while Tesla sales have grown. It was expected, with competition, that Tesla’s share of the market would moderate, but something happened in the last few weeks that has caused the company to absolutely nosedive.

What could it be? There are a lot of reports, and some data, that show it’s political. I’m less interested in this as a value judgment. What’s fascinating to me is that a company has gone from being a symbol of the eco-left to an association with the hard-right. Nowhere is that clearer than in the EU, where Tesla sales in January dropped more than 50% year-over-year.

That’s one way a CEO can absolutely trash a company. If you’re a regular here at The Morning Dump Cafe, then you’re aware of some other ways. Carlos Tavares saddled Stellantis with a plan that made no sense, which is going to result in another tough year according to the company. Lucid’s CEO Peter Rawlinson is someone we like around here, though he’s not going to come around here as much as he used to.

And, finally, Aston Martin’s CEO is in the process of turning the company around, though it hasn’t turned around yet.

‘I Felt Nothing But Disgust’ Complains European Tesla Owner

Cards on the table, I was expecting Tesla to lose about 20-25% of its sales in the European Union countries in January. That would be a big swing from December, when Tesla’s year-over-year sales were up 5.9%. With electric car sales still climbing in Europe, even a 20% drop would have been a big deal, but I could have probably buried the story deeper in The Morning Dump like I’ve been doing lately.

The combination of production slowdowns due to planned model upgrades and increased competition would have made that 20% seem bad, but not so bad that it’s the first thing I had to talk about this morning.

That’s not what happened. Here are the latest numbers from Europe’s car industry association (ACEA), and it’s so much worse than I guessed. For the EU countries, BEV sales increased by 34% year-over-year in January. Add in the EFTA countries and the UK, and you get a 37.3% increase. It’s a great time to sell electric cars in Europe.

Unless you’re Tesla. In the EU as a whole, Tesla sales dropped by 50.3% and the company’s total market share there dipped below 1.0%. That’s real bad. The American automaker only sold 7,517 cars. By comparison, Jeep sold 9,935 (including the EV version of the Avenger). Suzuki sold 12,395. Mazda, which also had a rough January, outsold Tesla by about 400 cars. Things are a little better when you add in the EFTA countries and UK, with Tesla only dropping 45.2% year-over-year.

Again, this isn’t great, and the market noticed, with Tesla shares dropping about 8% yesterday and the company dipping below the $1 trillion valuation it once had. There are a lot of buyers out there looking to pick up Tesla shares when it sinks, so I wouldn’t be surprised if Tesla comes back a bit today. More than any other modern company, Tesla is less tethered to business fundamentals and p/e ratios. CEO Elon Musk is a dreamer and, if you believe that dream, you typically make money.

It’s also just one month. Tesla can lower prices. It can start taking deposits for some kind of “affordable Tesla” that’s maybe a decontented Model 3 or something. Options exist. Again, though, the premise of Tesla is that it’ll keep doing amazing things forever. Owning shares in the company, like being a Mets fan, is an exercise of faith in the face of increasing uncertainty. Remember, Tesla famously does not pay dividends. So what happens if that faith goes away? Tesla isn’t worth nothing because, even with all of this, it’s still a profitable company. It does become a more “normal” company, perhaps, with a valuation more grounded in its earnings-per-share.

So here’s the thing I didn’t want to write that I’m going to write anyway. This is about politics. There are a lot of reasons why Tesla was always going to be less competitive, but it doesn’t happen this fast or this dramatically without some other cause. And there have been signs, like polls showing Elon Musk becoming increasingly unpopular with certain people. Then there’s California, where buyers have started to turn away from the automaker. Given that Tesla still sells a lot more EVs than the next few automakers combined in the United States, it’s been easy to dismiss this as a problem around the margins.

For instance, here’s a whole article in Bloomberg talking about Tesla owners in California getting angry about owning a Tesla:

“I don’t know if there’s ever been a greater destruction of brand equity in this short amount of time,” said Tom Price, a resident of Berkeley, California, who showed up to a demonstration in the city with a Don’t Drive DOGE sign. “Tesla has become a four-wheel billboard for the immolation of our democracy.”

I do not, as a rule, take things that residents of Berkeley, California say at a protest as any kind of indicator of what average people think. Until I see otherwise, I’m just going to assume that the majority of pragmatic car buyers will just sluff off the Elon Musk thing (and some will now be more pro-Musk) and buy his cars.

Europe, though, is different. Europe has way more affordable EV options. It has Chinese automakers. It has the Renault 5 E-Tech. Also, being made up mostly of countries with parliaments, there’s a fluidity to European politics we don’t have here. The Republican Party has to serve both people like Mike Lawler and MTG, just like the Democratic Party has to encompass Ruben Gallego and AOC. If Europeans get mad at their own party, they’ll just make up a new one and we have outcomes, like in Germany, where a party can go from being a part of a governing coalition to having zero seats in a single election.

And Europeans, in large numbers, seem to be over Elon Musk. There’s a new piece in The Guardian talking about it:

For years the brand has been synonymous with Elon Musk and his stance against the climate crisis. Recently, Schwede watched aghast as the Tesla CEO poured hundreds of millions into backing Donald Trump as he made promises to ramp up domestic oil and gas production.

“He was getting more and more weird,” said Schwede, an entrepreneur and digital strategist based in Switzerland. The final straw came when Musk made back-to-back fascist-style salutes during Trump’s inauguration in January. “I felt nothing but utter disgust,” said Schwede. “And I no longer enjoyed sitting in my Tesla.”

Germany, though, is what I’m interested in. There’s a huge market there and Tesla builds cars in Germany. At the same time, Musk brought his political roadshow to Germany and supported the hard right-wing AfD party. That party did way better than usual in elections, though it only made up about 20% of the total electorate and is likely to be kept out of a governing coalition.

From that Guardian article:

For Germany’s Patrik Schneider, the turning point came as he was heckled by a stranger at a petrol station, who pointed to his Tesla and called him a Trump supporter. Saddled with a long-term lease on the vehicle, he scrambled to find a way to address his relationship with a brand that – in his mind – had soured.

“Of course, as a Tesla driver you were always the fool: the Green party voter, the world saviour, the CO2 guy,” Schneider told Germany’s Capital.de media. “But now you’re in a category that’s no longer funny.”

What he came up with was a line of “Anti-Elon stickers” for Tesla cars. In an echo of an American initiative, he began selling the stickers online six months ago, taking orders for messages that range from “I bought this before Elon went crazy” to “Elon sucks”.

A recent poll of Germany showed that adults in the country have a 71% unfavorable view of Musk, with 73% saying that Musk’s involvement in German politics is “unacceptable.”

This gets to the thing I am most curious about re: Musk and his recent shenanigans. There’s a sense of helplessness on the left, with few elections on the horizon. Tesla is an easy target as it relies on both customers and shareholders to sustain its value. What if the left’s version of the Tea Party decides to take its ire and wrath out on Tesla? In this country, at least, Tesla owners are already facing increased vandalism.

It’s super strange that the same people who claimed buying a Tesla was some kind of lefty environmental stance are now acting as if owning a Tesla is tantamount to burning the flag. These kinds of feelings, though, are hard to sustain and I’m not sure how long they’ll last here in the US. In Europe? As Eddie Izzard once joked, Europe is where the history comes from, and their memories tend to be a little longer.

Stellantis Forecasts ‘Mid-Single Digit’ Margins As Earnings Drop 102% In Second Half Of 2024

My big guess in 2024 was that Stellantis couldn’t “stick the landing” as none of its financial forecasts or product plans made any sense to me. The company had too many expensive and/or old vehicles. America, for whatever reason, felt like it was being entirely ignored.

This has been borne out by the company’s financial performance, which was absolutely dismal. Saddled with a bunch of cars that were uncompetitive, Stellantis had to lower prices and increase incentive spending. The results were a 70% year-over-year drop in profit. It gets even worse if you look at the second half of 2024, when the company went from making $8.1 billion to losing $133 million.

The Stellantis Board of Directors saw what was happening and essentially plank-walked then-CEO Carlos Tavares, not pictured, in order to try and salvage the company. This year the goal is to try and turn things around as best as they can and to get a new CEO.

Here’s what Chairman John Elkann had to say about it:

“While 2024 was a year of stark contrasts for the Company, with results falling short of our potential, we achieved important strategic milestones. Notably, we began the rollout of new multi-energy platforms and products, which continues in 2025, started production of EV batteries through our JVs, and launched the Leapmotor International partnership. Stellantis’ dedicated and talented people are driving forward with energy and determination, engaging with key stakeholders and moving decision-making closer to our customers. We are firmly focused on gaining market share and improving financial performance as 2025 progresses.”

What this means is positive revenue growth, but at the cost of continued single-digit margins, which will impact profits. If there’s a trade war and tariffs come, it’ll only get worse.

Peter Rawlinson Steps Down As Lucid CEO

Because he’s an engineer, there’s definitely been a pro-Peter Rawlinson vibe around these parts. As CEO of Lucid Motors, the former Tesla engineer managed to raise enough funding to actually build cars. And the cars are great. The best electric car you can buy in America, if price is no option, is the Lucid Air.

Also, according to Lucid, Rawlinson is no longer the CEO of the company:

“Now As we have successfully launched the Lucid Gravity, I have decided it is finally the right time for me to step aside from my roles at Lucid,” said Rawlinson. “I am incredibly proud of the accomplishments the Lucid team have achieved together through my tenure of these past twelve years. We grew from a tiny company with a big ambition, to a widely recognized technological world leader in sustainable mobility. It has been my honor to have led and grown this remarkable, truly world-class organization, because Lucid has always been first and foremost about a team effort. The time has now come for me to hand the baton to that very team.

That team, at least for the interim, is going to be led by COO Marc Winterhoff, pictured above.

Also, Lucid reported its 2024 and Q4 financials and they were pretty bad. The company delivered 10,241 vehicles and lost $3.03 billion last year. The thing people like to do here is point out that the company lost $300,000 per vehicle sold. That’s technically true. Granted, the company is rapidly trying to get its Lucid Gravity out the door, so there are a lot of costs it has to eat.

Don’t feel bad for Rawlinson. His watch is done and he’ll get to collect $120,000 a month for his role as an advisor.

Aston Martin CEO To Axe Jobs, Trim Costs To Try And Save Company

Aston Martin is a cool automaker that’s going to have to make some big changes if it wants to stick around, including cutting jobs and trimming costs as it plans to focus on squeezing more money out of each model rather than introduce a bunch of new cars.

Additionally, after many delays, the Aston Martin Valhalla is finally rolling out to customers this year.

Per Reuters:

Aston Martin plans to produce only 999 units of Valhalla, each reportedly priced at 850,000 pounds ($1.1 million), with deliveries to begin in the second half of 2025. Aston Martin declined to confirm the price.

The Valhalla is expected to help drive positive adjusted operating earnings in 2025 and free cash flow in the second half, the company said. Overall core wholesales volumes will be similar to 2024 levels, it said.

Aston Martin is not planning to launch any new models in the near future to save money on development costs, sources told Bloomberg. It will instead try to launch more derivatives of its existing models, something that Lamborghini, Porsche and Bentley have successfully done.

Maybe get Winterhoff on it?

What I’m Listening To While Writing TMD

I’ve been in a Japanese Jazz mood (J-Jazz) lately, so please enjoy the “Akashic Xronicles” from Tokyo-based Fox Capture Plan.

The Big Question

What European-market EV are you buying? Cost is no object.

Top graphic image credits: Jeep, Tesla