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Tesla continues to face challenges in Europe, as new car registrations showed a sustained drop for seven straight months. Tesla remains pressured from its main competitor BYD, which is dominating the EV industry, especially in Europe, experiencing a high surge in sales.
Tesla Sales Decline in Europe
Tesla’s new car registrations in Europe fell in July, recording 8,837 registered vehicles, a 40.2% decline YoY, according to the European Automobile Manufacturers Association (ACEA). In Eurozone regions alone, registration of new cars fell by 42% YoY to 6,600 vehicles. This decline led to a reduced market share for Tesla in the region from 1.4% to 0.8%. Tesla sales in Europe fell 33.6% YTD. ⁽¹⁾
Despite a surge of 33.6 % in electric battery sales in Europe, Tesla continues to struggle in keeping up with its competitors. The EV maker’s last sales increase in Europe was in December 2024, with only a slight growth of 5.9%. ⁽²⁾
Tesla’s challenges include lack of updates on its vehicle lineup and company reputation which are tied because of CEO Elon Musk’s controversial political collaborations, including his past involvement with US President Trump and alleged connections with a German far-right party. These factors have fueled boycotts from consumers across Europe and the United States, hurting Tesla’s brand image.
Tesla sales were expected to pick up at some point this year, boosted by an updated Model Y, Tesla’s best-selling model. The sales recovery, however, hasn’t arrived yet. Globally, Tesla sold 720,803 vehicles in the first half of 2025, down 13% YoY. ⁽³⁾
Tesla shares were down 1.4% on August 28th amid bad sales bad sales data from Europe.
BYD’s Rise and Chinese EV Dominance
BYD sold more cars in Europe than Tesla once again last month, a sign that Elon Musk’s electric-vehicle maker continues to face stiff competition from its Chinese rival as it expands aggressively in the continent. ⁽⁴⁾
New-car registrations for BYD models tripled YoY to 9,698 vehicles across the Eurozone in July, according to the European Automobile Manufacturers’ Association. When including the UK, Iceland, Liechtenstein, Norway and Switzerland, sales more than tripled to 13,503 vehicles. ⁽⁵⁾
Chinese carmakers have been expanding aggressively in Europe, winning market share from domestic rivals thanks to their relatively cheap and varied lineups of electric vehicles. Chinese state-owned automaker SAIC Motor also outsold Tesla in Europe in July, according to ACEA data. BYD first outsold Tesla in the continent in April, according to data from JATO Dynamics, a consumer-research group. ⁽⁶⁾
Aside from stiff competition overseas, Tesla has been dealing for months with the fallout from Musk’s previous involvement with the Trump administration. Investors were concerned the Tesla CEO wasn’t spending enough time at the company during his time in Washington.
Tesla’s net income dropped 16% in the second quarter. The company has been revamping its lineup lately to appeal to more buyers. Since March, it has refreshed its Model Y crossover SUV, made updates to its luxury Model S and Model X vehicles and released a pared-down, lower-cost version of its Cybertruck. ⁽⁷⁾
