Tesla’s German market faces headwinds as October sales figures reveal a significant downturn. According to data released Wednesday by Germany’s federal transport authority (KBA), Tesla recorded only 750 electric vehicle (EV) sales in Germany for October 2025, a stark contrast to the 1,607 units sold during the same period last year.
While the overall German EV market shows robust growth with 434,627 new battery electric vehicles registered year-to-date – a nearly 40% increase compared to the previous year – Tesla’s performance lags considerably. Year-to-date, Tesla’s German sales stand at 15,595 units, marking a 50% decrease compared to the same period in 2024.
This decline is particularly noteworthy given Tesla’s substantial investment in the region, including its Gigafactory Berlin-Brandenburg. Despite the local production capacity, Tesla struggles to resonate with German consumers as much as anticipated. Analysts point to a confluence of factors contributing to this underperformance.
Firstly, Musk’s increasingly polarizing public persona and perceived alignment with the right-wing AfD party are believed to alienate a significant portion of the German consumer base, particularly those with left-leaning political views. Brand perception plays a crucial role when consumers are presented with more choices.
Secondly, Tesla faces intensifying competition from both European and Chinese automakers, who are introducing a range of smaller, more affordable EVs. A prime example is the proliferation of models priced below 35,000 euros, directly challenging Tesla’s market position.
In response, Tesla introduced a lower-cost version of the Model Y SUV in Germany during October, priced at 39,990 euros – approximately 5,000 euros less than previously available configurations. However, the initial impact of this price adjustment on sales remains uncertain. The company will need to closely monitor its order rate and deliveries in the coming months to assess the effectiveness of this strategy. Whether this more accessible model can rejuvenate demand for Tesla EVs in the German and broader European markets remains to be seen. Early indicators suggest that while it has generated some interest, it has not yet reversed the overall downward trend.
Furthermore, shifts in government policies also influence the EV market dynamics. The discontinuation of EV purchase incentives two years ago led to an initial dip in demand. However, the German government is planning to re-introduce an incentive program in January 2026, targeting low- and middle-income buyers. The effectiveness of this incentive program will be crucial in driving overall EV adoption, but it might not disproportionately benefit Tesla, given the increased competition in the market. The program is designed to be technology-agnostic, meaning it won’t favor specific brands or models.
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