Evening Briefing: Europe

Tesla’s woes are continuing in Europe even as EVs generally enjoy stronger demand in the region. The Elon Musk-led carmaker saw its sales sump with new vehicle registrations dropping 39% last month in Germany and 56% through the first eight months of the year, according to official road traffic statistics.

Sales also posted steep August falls in France, Belgium, Denmark and Sweden. Tesla’s worldwide vehicle deliveries fell 13% in the first half of the year, putting the company on course for its second consecutive annual decline.

Meanwhile, Volkswagen is is trying to harness the legacy of one of its best-selling cars, with a compact electric hatchback. The manufacturer today unveiled the ID. Polo, which is expected to be priced below €25,000 when it goes on sale next year. It will try to compete with Chinese brands including BYD and Zhejiang Geely that are expanding in Europe with competitively low-cost offerings.

In Germany, battery-electric vehicle registrations soared 46% industrywide this month, continuing a trend of strong EV sales even as Tesla struggles. — Jennifer Duggan

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Bank of England Deputy Governor Clare Lombardelli said interest rates may need to settle only slightly below their current level of 4% to keep inflation under control, in her first public comments since August’s quarter-point cut. In annual written evidence to the Treasury Committee of lawmakers, Lombardelli said she “judged that there might not be that much further to go before the current policy stance is effectively neutral” and “it’s plausible that neutral may be closer to the upper end of the 2-4% range from Bank analysis.”

Europe’s private credit market is gaining ground on the US, according to Moody’s Ratings. Over the last several years, the depth of the market in Europe has lagged behind the US, Moody’s said in a report today. That’s mostly because of regulatory and legal issues. However, the region is poised for growth, given untapped market potential and deglobalization, which will force greater autonomy from the US and drive increased spending. Some progress has already been made to implement reforms that would stimulate the sector.

German Foreign Minister Johann Wadephul said he’s hopeful a long-stalled free-trade accord between the European Union and India can be concluded as soon as the autumn. The EU launched formal negotiations on a deal with the government in New Delhi nearly 20 years ago but progress has been hampered by differences in areas like agriculture and market access. The EU is seeking to shore up economic ties with India amid concern that US President Donald Trump’s trade-tariff onslaught could push the South Asian nation’s focus increasingly toward China and Russia.

UK Deputy Prime Minister Angela Rayner admitted she underpaid taxes on a property purchase, the latest blow for Keir Starmer’s Labour administration. Rayner said that she was referring herself to the government’s standards watchdog after conceding that claims she underpaid stamp duty were accurate but that she had been following legal advice that later proved incorrect. Regardless, the revelation is highly awkward for Rayner, and leaves a politician who’s considered a leading contender to eventually succeed Starmer fighting for her political future.

Angela Rayner. Photographer: Chris Ratcliffe/Bloomberg

Anthropic has named the Qatar Investment Authority as a “significant” investor in a $13 billion financing round that valued the company at $183 billion. That puts Qatar into a race with its deep-pocketed Gulf neighbors for AI deals. It also marks a turning point for Anthropic, which has positioned itself as a more responsible alternative in AI. Chief Executive Officer Dario Amodei has long raised concerns about handing authoritarian regimes access to advanced AI models, and Middle Eastern funds weren’t part of previous funding rounds.

Iran’s blackout of international inspections has led to a critical loss of knowledge about the country’s nuclear work, the United Nations atomic watchdog wrote in two restricted reports we saw. The International Atomic Energy Agency reiterated in the documents that it hasn’t been able to verify Iran’s stockpile of enriched uranium since mid-June. Because of Iran’s failure to cooperate with the IAEA, European powers last week referred Iran back to the Security Council for a resumption of UN sanctions.

Montenegro is lobbying all leaders in the EU to allow the Balkan nation to join the world’s largest trading bloc and officially adopt the euro by 2028. The coastal tourist-dependent economy of 600,000 people is the front-runner among 10 countries seeking to join the 27-member union and also the first that already uses the euro, albeit unilaterally. After the collapse of Yugoslavia it didn’t have its own currency, using first Deutschmarks, then euros.