(Reuters) -Tesla sales in Germany dropped in March compared with the same time last year and were marginally lower in the UK, despite a spike in overall EV sales in both markets, data showed on Thursday.

Elon Musk’s all-electric brand sold 2,229 cars in Germany and 7,220 in Britain, down respectively 42.5% and 0.6% from March 2024, adding to a slump in European markets that contributed to its lowest quarterly sales in almost three years.

Billionaire CEO Musk, a close ally of U.S. President Donald Trump, has stirred controversy by courting far-right parties in Europe, which has deterred potential buyers ahead of the much-anticipated launch of its Model Y mid-size SUV.

Analysts said his rumoured departure from the U.S. Department of Government Efficiency might help Tesla (NASDAQ: TSLA )’s stock recover some losses, after it dropped around 30% so far this year.

"The longer Musk stays at DOGE, this adds more risk to the Tesla story and could face permanent brand damage," brokerage Wedbush said in a note on Wednesday.

German road traffic agency KBA said the number of Teslas sold in the country between January and March 2025 dropped 62.2% to 4,935 units, compared with the same period last year.

By contrast, the total number of newly registered electric vehicles increased by 38.9% in the quarter, KBA said.

German Economy Minister Robert Habeck told a news conference on Thursday the brand had suffered.

"The perception is that the passion for Tesla has suffered greatly in recent weeks and months, which is perhaps a good opportunity for the automotive industry in Germany. So unexpectedly, there is also a gap in the market if they bring good, powerful cars to market," Habeck said.

In the UK, Tesla’s biggest market in Europe, its quarterly sales rose 3.5% to 12,628, but its share of the EV market dropped by over 4 percentage points to 10.7% as the country reported a record of over 68,000 EV sales in the quarter, data by research group New AutoMotive showed.