The Downward Spiral Continues

Tesla isn't doing so well.

Photo by Paul Steuber on Unsplash

No matter how hard Musk tries to convince you otherwise, Tesla is a car company. Pretty much all of Tesla’s revenue comes from selling electric cars, insurance for those cars and operating a charging network for those cars. Which is a bit of a problem, as Tesla’s sales are currently in a nosedive. Now, this likely isn’t new news to you, but I don’t think you realise just how bad things are. You see, it’s not just that sales are getting worse, but the context around this monumental drop off of Tesla’s critical core business is damning. When you look at the big picture, it is hard not to see this once revolutionary company as a giant, dead, hollow tree.

Take a look at the chart below detailing Tesla’s January sales from 2024 to 2026 by country. It isn’t pretty.

Sources: Clean Technica for EU sales, Electrek for China sales and Electrek and Electric Vehicles for US Sales

Just take a moment to look through those numbers. This is a company in a rapid downward spiral. As always, the real picture is painted by the context of these numbers, because the few positives are not as good as they seem, and the negatives are far worse than you might think.

Let’s start with Europe. Yes, Tesla’s European January 2026 sales are only down 13.08% compared to January 2025, but that is only because January 2025 was already way down in January 2024. In fact, Tesla’s European sales are now down nearly 50% from 2024, which is a colossal decline! Especially when you consider the EU EV market is expanding rapidly, with EV sales in Jan 2026 being up 24% from January 2025.

What makes this decline more painful is that many EU countries that were once Tesla strongholds are now posting some of the biggest sales declines. Take EV-mad Norway, where Tesla’s January sales were an astonishing 87.92% down from January 2025.

But what should really scare Tesla is who is replacing them. In 2025, VW sold more EVs in Europe than Tesla for the first time. And that is just VW, not including its sub-brands such as Audi, Skoda, Porsche, or Cupra, whose EVs are also selling incredibly well in the EU market. Unfortunately, it’s more than just local manufacturers who are taking Tesla’s lunch money. By the end of 2025, BYD was also outselling Tesla in Europe 3 to 1. That trend has continued, with BYD selling twice as many EVs in the UK as Tesla in January 2026.

This replacement isn’t just a case of Tesla losing market share as its tiny product line ages and the EV market matures. Something far more fundamental is kneecapping Tesla. Elon Musk’s heinous and rather public machinations have decimated Tesla’s brand. In fact, a recent study into consumer trust found Tesla was dead last of the 30 companies they surveyed, ranking way behind Meta, Temu, and Shein, a company that has just been caught selling child s*x dolls! Consumers quite simply don’t want to cosy up with Musk because they don’t trust him and they don’t want to support him. That, combined with the fact that consumer sentiment towards EV models and brands from European and Asian manufacturers is skyrocketing, is pushing Tesla out of the market. This isn’t just about their cars not being market leaders but also the politics and brand dynamics at play.

Now, there are a few countries, such as Ireland, Finland, and Italy, where Tesla actually experienced surprisingly good sales in January 2026. But they aren’t anywhere near as impressive as they look.

For one, Tesla’s sales in all of these “growth” countries are absurdly tiny. So while the percentage growth might seem impressive, it equates to only a few hundred more vehicles sold. That isn’t enough to even budge the needle on Tesla’s overall revenue. And these gains aren’t just small; they aren’t really gains at all. Take Ireland, where EV sales in January 2026 surged 48.7% from January 2025 to 7,319! So, Tesla’s 143 sales this January mean it has just a 1.9% market share. It also means that, although sales appear stable (0% change from January 2025 to January 2026), relative to the overall EV market, Tesla is incurring substantial losses in the country. Something similar is happening in Italy, where EV sales surged 40.7% this January compared to last, with total sales reaching 9,423. So yes, Tesla’s 710 sales in Italy this January do mean that the company’s sales are growing faster than the overall market and are increasing their market share, but they still only account for just 7.5% of Italy’s EV market. That simply isn’t good enough for Tesla.

But what about Tesla’s homeland, the US?

Well, it looks like Tesla’s losses are growing, with January 2026 sales being 17.32% lower than January 2025 sales, a markedly worse result than January 2025, which was just 9.9% down from January 2024. That means that Tesla has actually lost more ground in the US over the past year than it has in the EU, which tells you everything you need to know about Musk’s popularity over the pond. However, it might actually be even worse than it appears. Let me explain.

Tesla doesn’t publish monthly sales data, so we have to make educated guesses for its registration data, and currently, it looks like 72% of Tesla’s 40,100 US January sales were Cybertrucks. If you have been paying attention, that seems a little fishy, to say the least! The Cybertruck is an unmitigated sales failure, with Tesla selling just 20,200 last year. In fact, sales were so slow that Tesla had billions of dollars’ worth of unsold Cybertrucks piling up in inventory. Yet apparently, it seems that in the first month of this year, Tesla has magically shifted 28,872 of them — significantly more than they sold in the entirety of last year. How?

Well, we know that Musk has instructed SpaceX and xAI to buy up the Cybertruck surplus (read more here). So, have they done this again, just on a much larger scale? I don’t know, and there isn’t enough information to confirm what is really going on. But there is a possibility that Tesla’s US sales are being dramatically inflated by Musk buying his own products, and even then, sales are still markedly down. The fact that this is even a possibility is horrific news for Tesla.

Then, there is China, where Tesla’s sales have functionally collapsed, with January 2026 sales being 45% down from January 2025. I cannot stress how big a problem this is. China is Tesla’s second-largest market, after the US, and has been a critical source of revenue for years now.

Truth be told, the Chinese EV market is having a bit of a rough time, with total EV sales this January down 17% compared to last January. But that doesn’t explain, or really excuse, Tesla’s losses. There are major players making huge gains in the Chinese market. Take Xiaomi, the mobile phone company that began dipping its toes into the EV world just a few years ago. The new SU7 is significantly cheaper, has a far longer range, much faster acceleration, and far quicker charging than Tesla’s alternative, the Model Y. As such, the SU7 is now China’s best-selling EV, with Xiaomi selling 37,896 of them in China this January. That means this single model, sold by a relatively new player in the EV market, sold more than double the number of cars Tesla sold in China this January!

Tesla’s pitiful performance in the Chinese market reflects how far they have fallen behind domestic EV makers. They simply don’t have the technology and a low enough price to compete. When you consider that Musk is directing pretty much all of Tesla’s R&D funds to AI and silly humanoid robots, it’s hard not to conclude that this likely isn’t going to change any time soon and that this downward trend will continue.

But, surely, none of this will matter when Tesla’s Robotaxi and humanoid robots replace this lost revenue?

Well, no. Even Tesla insiders don’t think Robotaxis or robots will work (read more here). So, don’t hold your breath on that one.

Tesla really is a dead, hollow tree. Its very core is dying away, yet for some reason it is still perceived as a powerful giant. It simply can’t carry on like this forever, and at some point, it will all topple over as the rot finally destroys what is left of the trunk propping this whole thing up.

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Thanks for reading! Everything expressed in this article is my opinion, and should not be taken as financial advice or accusations. Don’t forget to check out my YouTubechannel for more from me, or Subscribe. Oh, and don’t forget to hit the share button below to get the word out!