Evening Briefing: Europe

Tesla saw its sales plunge 45% across Europe last month despite a rise in demand for electric vehicles for rival carmakers. Founded by billionaire Chief Executive Officer Elon Musk, the company registered just 9,945 cars across the continent in January, down from 18,161 a year ago, according to figures from the European Automobile Manufacturers’ Association. Tesla’s stock dropped on the European sales figures, sinking the company’s market value below $1 trillion.

The company is revamping production lines for its most-popular Model Y vehicle, may partly explain the dip in registrations. Inventory shortages in some markets also had an impact.

However, the polarizing views of Musk, along with his involvement in global politics are also viewed unfavorably in Europe, according to polls in Germany and the UK. He has backed far-right parties and attacked incumbents across region. Those developments are unfolding as signs emerge that the weight of US President Donald Trump’s policy onslaught is becoming a bit too much to bear on global financial markets. — Jennifer Duggan

What You Need to Know Today

UK Prime Minister Keir Starmer outlined plans for a dramatic increase in defense spending — rising to 3% of economic output over the next decade. European governments are seeking to bolster their security amid doubts over US support under Trump. Starmer announced what he called “the biggest sustained increase in defense spending since the end of Cold War” in the House of Commons as he prepared for a visit to Washington later in the week.

UK Prime Minister Keir Starmer during a meeting at 10 Downing Street in London on Feb. 6. Photographer: Andy Rain/EPA

Bitcoin tumbled below $90,000 to hit the lowest level since mid-November. The rally that followed Donald Trump’s election to the White House reversed under the weight of his trade tariffs and a string of industry setbacks. Bitcoin dropped as much as 7.6% and traded around $88,800 at 9:36 a.m. New York. Other cryptocurrencies also fell, with Ether, XRP and Solana down sharply for the session. An index tracking top digital tokens was on pace for its largest four-day drop since early August.

Billionaire Patrick Drahi’s telecom provider Altice France is close to finalizing a deal with creditors to cut the company’s debt pile by €8.6 billion ($9.04 billion) in exchange for a non-controlling equity stake and governance changes. Secured creditors will receive a 31% stake, a cash payment and reinstated secured debt with tighter documentation that limits related-party transactions, people familiar said. The deal culminates months of negotiations between the company — which owns France’s second-largest mobile-phone carrier, SFR — and its creditors.

The European Union expressed “serious concerns” about making implementation of tough new trading rules voluntary for a period of time. It effectively shoots down a proposal put forward by the region’s top banking lobby. The rules — the final part of a package of reforms — were already postponed last year to prevent large lenders including Deutsche Bank and BNP Paribas from being disadvantaged if the US scales back regulation for their Wall Street rivals.

A push to build more renewable energy generation in Germany will begin to bring down wholesale power prices by the end of next year, according to market analysts. Electricity prices in Germany have been consistently more expensive than neighboring France since the end of 2023 with the spread at its widest earlier this month at €28. This difference is largely due to France benefitting from its large fleet of around-the-clock nuclear generation.

Unilever pushed out Chief Executive Officer Hein Schumacher after less than two years. It signaled that the board wasn’t satisfied with the pace of restructuring at the maker of Hellmann’s mayonnaise and Ben & Jerry’s ice cream. The Anglo-Dutch consumer goods company said Chief Financial Officer Fernando Fernandez will take over as CEO on March 1 and hailed his ability to “drive change at speed,” hinting that the board wants to push Unilever’s transformation even faster.

A key measure of euro-area pay growth eased at the end of 2024, supporting European Central Bank plans to keep cutting interest rates as inflation slows. Fourth-quarter negotiated wages rose by 4.1% from a year ago, the ECB said today. That’s down from the 5.4% record seen in the prior three months. The data back the ECB’s assumption that salaries are set to rise more slowly. That should eventually also lead to easing services inflation, which has been stuck around 4% for months and is a lingering concern for policymakers.