Tesla's decision to significantly cut prices on its electric vehicles at the start of the year is paying off big time.

Sales are booming due to the lower prices, helping Tesla increase its market share globally. This trend is particularly noticeable in Europe, where Tesla slashed prices of its best-selling models, the Model Y and Model 3 in January.

New data from European Automobile Manufacturers' Association (ACEA) picked up by Barron's shows Tesla's sales in Europe grew faster than any other automaker in February. Registrations of Tesla EVs in the European Union rose to 19,249 units last month compared to 12,860 in February 2022. That's just shy of 50 percent growth, which is Tesla's constant growth target.

Tesla's nearly 50 percent growth also vastly surpassed that of rivals, with Volkswagen's registrations growing by 18 percent across all powertrain types.

Tesla registrations accounted for 2.4 percent of the total car market in the EU in February 2023, up from 1.8 percent a year earlier. In the EV segment, Tesla dominated last month with a market share of about 20 percent, up about 2 percentage points year over year.

Total passenger car registrations in the EU increased by about 12 percent year-on-year to approximately 803,000 units, while battery electric vehicle (BEV) registrations increased by 40 percent to about 97,000 units. BEV registrations made up about 12 percent of total passenger car registrations in the European Union last month.

BEVs hold a smaller slice of the overall passenger car market in the EU compared to China, where BEV sales accounted for approximately 20 percent of all new vehicle sales in recent months. However, the market share of BEVs in the EU is double than in the US, where it was at almost 6 percent in 2022.

Tesla's market share in BEV sales also increased in China in the first two months of 2023 following the price cuts, according to data from the China Passenger Car Association.

While monthly data from each market may fluctuate due to many factors, the various data combined show that Tesla's price cuts are having a positive impact on its market share.

Morgan Stanley analyst Adam Jonas believes Tesla is the industry's cost leader and will continue to be the pricing leader, noting in a March 20 report that "EV price cuts are not a fad, they're a trend."