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Sales down 45% in January for EV maker led by Elon Musk

Tesla sales plummeted in Europe in January, suggesting waning demand for the US carmaker’s vehicles after its billionaire chief Elon Musk stepped up his high-profile interventions in the region’s politics.

The EV maker sold just 9,900 units in Europe last month, a decline of more than 45 per cent from the same period in 2024, according to data from the European Automobile Manufacturers’ Association. Its overall share of new car registrations fell to 1 per cent from 1.8 per cent over the same period.

Tesla’s falling market share comes after Musk’s unprecedented foray into EU politics, where he backed the far-right Alternative for Germany (AfD) ahead of the country’s elections, sparking a backlash on the continent. Musk has also railed against the EU, which he described in November as “undemocratic”.

The fall came even as European consumers purchased 166,000 battery EVs for the month, up 37 per cent from a year ago. Pure EV sales grew faster than those of all other types of vehicles, while sales of cars with petrol and diesel engines fell 20.5 per cent and 26.5 per cent, respectively.

The figures include the EU, UK and other markets including Norway, one of Europe’s biggest markets for EVs.

European sales by SAIC Motor, the Chinese state-backed carmaker that has expanded into the EU and partnered with Audi in China, rose 37 per cent to 23,000 vehicles in January, among the largest year-on-year increases in sales of any large manufacturer in the region.

Overall new vehicle registrations on the continent fell by 2.1 per cent in January to 995,271.

Chinese Manufacturers Speed Up Efforts to Dodge Trump Tariffs

Trump’s latest China tariffs accelerate plans for some businesses to shift production to Southeast Asia

After the Trump administration put a new 10% tariff on Chinese products earlier this month, Agilian Technology, an electronics manufacturer in China, pressed forward with its plan to avoid additional levies.

In the run-up to last year’s election, Agilian grew increasingly worried that the U.S. would introduce new tariffs if Donald Trump returned to the White House, and one of its key customers asked it to devise a contingency plan for such a scenario. Soon after, an executive from the company visited a factory in Malaysia to explore moving some production there.

Now the 10% levy—and the threat of more to come—is forcing Agilian to quickly set up production in the country, with the goal of sending its first goods to the U.S. in the spring.

“It is forcing us to accelerate the work,” said Renaud Anjoran, executive vice president of Agilian, who is visiting India soon to scope out other factories.

For many Chinese manufacturers, Trump’s return has added urgency to continuing plans to open factories or find partners in other countries, especially in Southeast Asia. Others that embarked on the “China plus one” strategy—finding a backup to China as the world’s factory floor—are moving more production abroad.

Some factories are looking for ways to lower prices and keep their products attractive as tariffs raise costs for U.S. buyers. But profit margins are already stretched thin in many industries in China, leaving limited room to trim prices.

Manufacturers are bracing for more pain. The Trump administration has proposed fees on Chinese shipping companies and Chinese-built ships entering U.S. ports. President Trump is also weighing reciprocal tariffs and new levies on automobiles, semiconductors and pharmaceutical products. On the campaign trail, Trump discussed tariffs of at least 60% on China.

Even before Trump launched his trade war against China in 2018, rising wages in the country prompted some companies to search for cheaper labor elsewhere. Tariffs on Chinese imports and the supply-chain disruptions caused by the Covid pandemic also illustrated to manufacturers the importance of diversifying.

Under higher tariffs, China’s share of U.S. imports has fallen. But China’s global trade surplus—the difference between the value of exports and imports—has only grown, while the U.S.’s overall trade deficit has widened. Some analysts believe that is due in part to Chinese companies rerouting production to other countries for goods that end up in the U.S.

Chinese companies looking for ways to dodge tariffs have expanded production to places such as Vietnam, Indonesia and Thailand. Outward direct investment from China into the manufacturing industry in Asean, a bloc of Southeast Asian countries, was about $9.1 billion in 2023, up from around $4.5 billion in 2018, according to China’s Ministry of Commerce.

Greenfield investment—the setting up of factories and new operations—accounted for most of the Chinese investment into East Asia and the Pacific since 2022, according to Fathom Consulting analysis.

Since Trump’s first presidential campaign, Steve Greenspon, chief executive of Illinois-based houseware company Honey-Can-Do International, has been interested in moving more of his production outside China. His customers, Walmart and other retailers, have urged him to diversify.

Before Trump’s first round of tariffs on China, Greenspon estimated his company made about 50% of its products in China, with the rest made in Vietnam and Taiwan. China now accounts for about 20% of production, while Vietnam makes up around 60% and Taiwan the remaining 20%.

One of his Chinese contractors, which makes velvet hangers, is setting up a factory in Cambodia. Greenspon expects the facility to be finished in about six months and has offered to move production there once the factory is up and running.

Discussion between the companies about moving some manufacturing elsewhere began during Trump’s first term, but it wasn’t until several months ago, when Trump’s chances of returning to the White House appeared more likely, that the plan became concrete.

“I would be surprised if, by the end of 2025, we’re doing any significant business in China,” Greenspon said.

Moving supply chains isn’t easy. It takes time and money to scout new locations, build facilities, train workers, get to know local regulations and bring up production quality and speed. Some manufacturers say China’s advanced infrastructure and robust supply chains make it easier to do business there than in other countries. Even if they move some production to another country, many say the materials for their products will have to be sourced mainly from China.

Trump’s propensity to keep the world guessing on his next moves makes it hard to commit to those investments. Companies could spend millions on a factory in another country, only to see Trump target that country, too—such as his proposed tariffs on Mexico, where investment from Chinese companies has increased in the past few years. Or Trump could quickly reverse some of his policies, as he did when he postponed tariffs on Mexico and Canada.

Sandra Wong, an overseas sales and digital-marketing specialist for an electronics maker in Shenzhen, said her company is preparing to ease some of the cost of tariffs for her clients by lowering prices. They are looking for ways to cut production costs without lowering quality, such as implementing more automation.

“We can discuss and negotiate with our clients,” she said. “We are all in this together.”

The latest tariffs will likely make it harder for her to attract new buyers, but she is hopeful her company’s products will remain attractive. She said her factory plans to make more high-value products, such as automotive electronics.

William Liu, sales director for Rongli Garments, a Yiwu-based manufacturer that makes seamless garments for retailers such as Walmart and Sam’s Club, said his company will reduce prices by 5% to help absorb some of the added tariff costs, which will cut into profits.

Economists found that tariffs imposed during Trump’s first term didn’t change export prices from Chinese manufacturers overall and that the higher cost of tariffs was largely passed on to U.S. customers. Research suggests that Chinese manufacturers’ low profit margins kept them from cutting prices further.

William Guo, a sales director for Qingdao-based tiremaker Lenston Tyre, said profits on his company’s products are too low to cut prices. Instead, his company will produce more from its facilities in Cambodia and Thailand, which currently handle about 30% of production outside of China. He estimates about half of his customers are American. “We will adapt to changing circumstances,” he said.

Anjoran of Agilian Technology said he could try to court more customers from Europe and Australia, but that the company won’t abandon American clients amid rising tariffs. He estimates around half of the products his company makes go to U.S. customers.

Despite the whiplash nature of Trump’s tariffs policy, Anjoran said his company can’t afford to just do nothing and wait for the dust to settle. He believes it will continue to get harder for Chinese manufacturers to sell their goods to Americans.

“It’s a megatrend that we cannot just dodge,” he said.