The electric car market in Europe underwent significant changes last year. Sales of the Tesla Model Y and Model 3 plummeted across the continent. Meanwhile, the Volkswagen ID.3, ID.4, and ID.7 models demonstrated significant sales growth. This decline for Tesla highlights the growing competitive pressure from other electric vehicle manufacturers.
A Challenging Year for Tesla in Europe
It’s no secret that last year was challenging for Tesla in the European market. After several years of the company outselling legacy automakers in electric vehicle sales volumes, 2025 brought a sharp reversal that few expected just a couple of years ago. The brand that once led the electric race is now lagging behind a familiar competitor with a very different history.
Volkswagen sold more battery-electric vehicles in Europe than Tesla last year.
Yes, VW, the same manufacturer embroiled in the diesel emissions scandal just as Tesla was preparing to launch the Model 3, has now overtaken the American brand on its home turf.
Change of Leader
According to Dataforce, the Volkswagen brand sold 274,417 fully electric cars in Europe in 2025, which is 56 percent more than in 2024 (175,654). For Tesla, the situation was not as optimistic.
Its sales fell by 27 percent last year, decreasing from 326,714 units to 238,765. This happened despite the fact that the Tesla Model Y remains the most popular electric car in Europe with 151,331 units sold last year, significantly more than the 94,106 Skoda Elroq sold in the same period. However, Model Y sales still fell by 28 percent compared to 2024, when 210,265 cars were sold.
Europe’s Most Popular Electric Cars
This is because the VW brand has a wider range of electric cars. For example, 80,123 VW ID.4 units were sold last year, which is 23.8 percent more. A total of 78,667 VW ID.3 units were sold, which is 44.4 percent more. The ID.7 also showed growth: 76,368 units found new owners, representing an increase of 137.2 percent.
To put these numbers into perspective, it’s worth noting that Tesla sold 86,261 Model 3s. And while this exceeds the figures for any single VW model, it is still 23.6 percent less than in 2024.
Volkswagen’s Success Extends Beyond Electric Cars
The strong year for VW was not limited to electric cars. The company also led the European plug-in hybrid (PHEV) segment, selling 159,173 units, which is 205 percent more than in 2024. This was enough to comfortably outpace BMW with 142,285 sales, followed by Mercedes-Benz with 135,878 and Volvo with 104,270.
The VW brand also led in sales of both gasoline and diesel cars. Its gasoline lineup sold 737,821 units in 2025, significantly ahead of Peugeot with 492,133, despite VW recording a 7.3 percent decline. Diesel car sales reached 269,277 units, which is 19.4 percent less than last year, but still enough to outpace Mercedes, which sold 250,326.
Most Popular Electric Car Brands in Europe
- 1st place: Volkswagen – 274,417 sales, growth of 56%.
- 2nd place: Tesla – 238,765 sales, decline of 27%.
- 3rd place: BMW – 193,186 sales, growth of 15%.
- 4th place: Skoda – 172,100 sales, growth of 117%.
- 5th place: Audi – 153,848 sales, growth of 51%.
Traditional hybrids were the only powertrain segment where VW did not secure first place, as Toyota retained the crown with 626,675 sales. Although VW did not make it into the top five, the situation could change this year as the company plans to launch the new T-Roc with a full hybrid powertrain.
These shifts in sales rankings clearly indicate that the European market is becoming increasingly diverse and competitive. Volkswagen’s success, especially with the ID models, shows how traditional automakers, by investing in electrification, can quickly catch up and even overtake industry pioneers. The decline in Tesla’s sales, despite the leadership of individual models, may be a signal that buyers are starting to look for alternatives, and the market is reaching a new phase of maturity where not only technology but also model range breadth, service network, and overall brand recognition become important. The future will show whether Tesla can regain its position through model updates or new strategic moves.