Tesla Inc. TSLA has seen a notable decrease in its worldwide market share for January, according to a recent report by UBS, 

What Happened: UBS analyst Patrick Hummel revealed that Elon Musk-led EV giant’s sales in Europe fell by 51% year-over-year, tagging it the region’s “biggest loser”. The EV giant also witnessed a 15% drop in retail sales in China, while local brands continued to grow, reported Investing.com on Friday.

Despite the global demand for EVs remaining strong, UBS analysts labeled January a “very poor month for Tesla.” The report also emphasized the growing competition in the EV market, as European EV sales saw a 33% year-over-year increase.

Chinese new energy vehicle (NEV) brands, including Xpeng XPEV, have been steadily increasing their market share. Xpeng, in particular, saw a remarkable 251% year-over-year surge in sales, driven by new product launches. In contrast, the U.S. market showed more stability, recording a 25% increase in EV sales compared to the previous year.

The U.S. market showed greater stability, with EV sales rising 25% year-over-year. However, despite sequential declines, overall U.S. auto inventories remained high in terms of days’ supply, according to UBS.

The UBS report did not provide specific details on Tesla's performance in the region but noted that other major automakers had mixed results, with General Motors GM rising 17%, while Ford F and Stellantis STLA experienced declines.

UBS also highlighted the ongoing debate surrounding U.S. auto tariffs, which could have implications for global car manufacturers. The bank warned that a potential U.S. tariff on European vehicles could have a substantial impact on German automakers.

SEE ALSO: Elon Musk’s Boring Company To Build ‘Dubai Loop’ To Handle Upto 100,000 Passengers Per Hour, Slashing Travel Time With Electric Vehicles

Why It Matters: Tesla’s market share decline comes amid increasing competition and challenges in key markets. In China, Tesla has been facing hurdles for years, with the Chinese government even banning Tesla cars from certain areas over national security concerns. Furthermore, BYD‘s BYDDY ‘God’s Eye’ and Huawei’s advances in autonomous driving heighten concerns for Tesla.

Meanwhile, Tesla’s potential for partnerships remains strong. Uber Technologies UBER CEO Dara Khosrowshahi expressed optimism about a possible partnership with Tesla for deploying autonomous vehicles on Uber's platform.

These developments underline the dynamic and competitive landscape of the global EV market, where Tesla continues to play a significant role despite recent setbacks.

• READ MORE: Will Tesla Finally Enter India? Modi-Musk Meeting Reportedly Focused On Tariffs, Starlink Licensing, And SpaceX