Tesla, the electric vehicle giant led by Elon Musk, is facing a sharp decline in sales in Sweden, marking one of its most significant setbacks in the European market to date. According to recent automotive industry reports, Tesla’s registrations in Sweden have dropped dramatically in the first quarter of 2025, raising concerns about the company’s strategy and public perception in the region.

The downturn comes amid an ongoing labor dispute between Tesla and Swedish unions. Since late 2023, Tesla has been locked in conflict with IF Metall, a major trade union representing mechanics and service workers. The union has been demanding that Tesla sign a collective bargaining agreement, something the company has refused to do. As a result, strikes and sympathy actions have severely impacted Tesla’s operations in Sweden, including vehicle maintenance, parts delivery, and even new car registrations.

In addition to labor tensions, Tesla is also battling growing criticism over its handling of worker rights and environmental concerns. Swedish consumers, known for their strong support of ethical business practices, appear to be turning away from the brand. Tesla’s market share in Sweden, once among the top for electric vehicle sales, has now been overtaken by competitors such as Volkswagen, Volvo, and BYD.

Data from Sweden’s transport authority show that Tesla sales in the country have plummeted by more than 70% compared to the same period last year. This collapse is particularly alarming considering the overall EV market in Sweden continues to grow.

Experts suggest that unless Tesla finds a resolution to the labor conflict and rebuilds its reputation with Swedish consumers, the brand could face long-term damage not only in Sweden but potentially across other Scandinavian markets as well.

As of now, Elon Musk has not made any public comment about the situation in Sweden. However, with regulatory pressure, public opinion, and union actions mounting, the company may be forced to shift its strategy sooner rather than later.