Does Tesla's Sales Boom in February Indicate a European Comeback?

Tesla Shows Signs of Recovery in European Markets

Tesla, Inc. (TSLA) has regained momentum in several key European countries this February, indicating a potential turnaround after two years of declining sales, according to Reuters.

In France, Tesla’s vehicle registrations—a key measure of sales—rose by 55%, bucking the trend as most competitors saw year-over-year drops. The company’s registrations more than doubled in Portugal compared to February 2024, soared by 74% in Spain, increased 32% in Norway, and climbed 14% in Belgium. However, Tesla experienced declines in the Netherlands (down 45%), Denmark (down 18%), and Italy (down 7%). Data from the UK and Germany, the two largest European auto markets, is expected soon.

Last year, Tesla’s deliveries in Europe fell by 27%, facing stiffer competition from Chinese electric vehicle makers, controversies involving Elon Musk, and an aging lineup. To address these challenges, Tesla launched more affordable versions of the Model Y and Model 3 in both the US and Europe, with deliveries starting late last year.

Tesla’s market share in the European Union, UK, and European Free Trade Association slipped to 0.8% in January, down from 1% a year earlier. This is a significant drop from previous years: 1.8% in 2025, 2.5% in 2024, and 2.9% in 2023, when the Model Y was the world’s best-selling vehicle. Currently, TSLA holds a Zacks Rank #4 (Sell).

Chinese EV Makers Expand in Europe

BYD Company Limited (BYDDY) has strengthened its presence in Europe by establishing a manufacturing facility in Hungary with an annual capacity of 300,000 vehicles. Although BYD is still early in its European journey, it is actively working to expand its reach. In 2025, BYD registered 187,657 new vehicles across Europe—a 268.6% increase year over year, according to the European Automobile Manufacturers Association.

Geely Automobile Holdings Limited (GELHY) has a well-established footprint in Europe through its ownership of brands like Volvo Cars, Polestar, Lotus Cars, a 50% stake in Smart, and London’s electric taxi business. Geely also owns 10% of Mercedes-Benz Group. The company is planning further growth in the region and is preparing to launch the Starray EM-I, a plug-in hybrid SUV positioned just below the EX5 in size and price. In 2025, Geely’s brands collectively became the largest Chinese automotive group in Western Europe, delivering 381,285 vehicles and securing a 3.2% market share.

Tesla’s Stock Performance and Valuation

Over the past six months, Tesla’s stock has lagged behind the Zacks Automotive-Domestic industry, gaining 11.6% compared to the industry’s 23.9% rise.

From a valuation standpoint, Tesla appears expensive, trading at a forward price-to-sales ratio of 14.04, which is significantly higher than the industry average of 3.35.

Analyst estimates for Tesla’s earnings have been revised downward: the Zacks Consensus Estimate for 2026 EPS has dropped by 4 cents over the past month, while the 2027 EPS estimate has decreased by 25 cents in the last two months.

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• Tesla, Inc. (TSLA): Free Stock Analysis Report
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