Tesla Faces Steep European Sales Decline Amid Leadership Reshuffle

The start of 2026 has presented Tesla with significant challenges in the European automotive market, where sales have plummeted dramatically. As traditional manufacturers and Chinese competitors gain ground, the electric vehicle pioneer has responded by appointing a new global head for its sales and delivery operations. Registration data from key countries underscores the severity of the current situation.

In a major executive move, Tesla has promoted Joe Ward to lead worldwide sales, service, and delivery. Ward, who previously oversaw the Europe, Middle East, and Africa (EMEA) region for more than five years, now assumes global responsibility. This promotion follows the recent departure of Raj Jegannathan, an experienced manager who held the sales and service leadership role for only a brief period.

European Registrations Reveal Sharp Contraction

January 2026 registration figures from several major European markets illustrate the extent of the downturn. Tesla experienced severe year-over-year declines in early-reporting nations:

• Norway: An 88% drop
• Netherlands: Down 67%
• United Kingdom: A 57% decrease, with only 647 vehicles delivered
• France: Registrations fell 42%

The competitive pressure is intensifying. During the same period, Chinese rival BYD nearly doubled its volume in the UK. Furthermore, Volkswagen had already surpassed Tesla to become Europe's top-selling EV brand in 2025.

Product Line Narrows as Strategy Shifts

Effectively, Tesla has halted production of the Model S and Model X for 2026. Its vehicle lineup now consists solely of the Model 3, Model Y, and the Cybertruck. This streamlining coincides with a strategic refocusing towards artificial intelligence, robotics, and autonomous transport technologies.

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Record Capital Expenditure Planned

Despite the sales headwinds, Tesla is planning a massive investment program for 2026, exceeding $20 billion. This amount more than doubles the $8.5 billion spent in 2025 and surpasses the previous record of $11.3 billion set in 2024. The capital is earmarked for six new manufacturing facilities, including plants for the Cybercab, a lithium refinery, and battery production. Funding for the Optimus humanoid robot project is also being increased.

Quarterly Results Show a Mixed Picture

Tesla's fourth-quarter 2025 financial performance presented a contrast. While vehicle deliveries declined 15.6% to 418,227 units and automotive revenue fell 11% to $17.7 billion, the company still exceeded certain analyst expectations. Its gross profit margin improved by two percentage points sequentially to 20%. However, net profit saw a steep 61% decline to $840 million.

Mounting Competitive and Operational Pressures

BYD currently leads the global market in electric vehicle deliveries. Meanwhile, established automakers like Volkswagen continue to expand their electrification efforts relentlessly. Operational tensions are also a factor, as evidenced by Tesla filing a criminal complaint against a union representative at its German factory.

Tesla shares closed at $428.27 on February 11, 2026, marking a daily gain of 0.72%. While the stock has advanced approximately 27% over the past twelve months, it is down nearly 5% since the start of the year. The company's market capitalization stands at around $1.4 trillion. The coming weeks will reveal whether the new sales leadership and unprecedented investment drive can stabilize Tesla's position in the critical European market.