by Tesla’s Sales Decline in Europe
Tesla’s sales in Europe in July 2025 fell by approximately 40%, halving the company’s market share. In contrast, BYD registrations increased by 225% to 13,500 units. Electric vehicles and hybrids now account for almost 60% of new car sales in Europe.
Intensifying Competition
Tesla’s influence on the European electric vehicle market is rapidly waning, and even the latest Model Y is not slowing this decline. In July 2025, the automaker’s sales fell by 40% compared to the previous year in the European Union, the United Kingdom, and EFTA countries (Iceland, Liechtenstein, Norway, and Switzerland), despite accelerating demand for electric vehicles across the continent.
According to the European Automobile Manufacturers’ Association (ACEA), battery-electric, hybrid, and plug-in hybrid models together accounted for 59% of new registrations, a historic high for electrified powertrains.
Sharp Contrast in Sales
The contrast could not be more stark. Across the EU, EFTA, and the UK, Tesla registered 8,837 cars in July, a significant drop from nearly 14,769 a year earlier. Within the EU itself (since the UK formally left the Union in January 2020), sales fell even further, by 42.4% to 6,600 units. This decline reduced Tesla’s market share in Europe from 1.4% to just 0.8% for the month.
While Tesla stumbled, Chinese automaker BYD surged ahead. Its registrations across Europe rose by 225% in July to 13,503 units, giving it a 1.2% market share and putting it ahead of Elon Musk’s brand. The rapid growth highlights how quickly Chinese manufacturers are capitalizing on Europe’s demand for affordable, well-equipped electric vehicles, shifting the competitive balance in the process.
Year-to-date figures still leave Tesla ahead with a 1.5% share compared to BYD’s 1.1%. But the gap has narrowed significantly, as Tesla fell from 2.3% in 2024, while BYD tripled its position from 0.3%.
Tesla’s Recovery Possibilities
Will Tesla find a way to recover in the four months remaining until the end of the year? Maybe yes, maybe no – but if it were our money, we wouldn’t bet on it. You see, it will be a tough fight, as Chinese competitors (among which BYD is a prime example) have flooded Europe with a wide range of hybrids and electric vehicles that are highly competitive on their own and have prices lower than competitors, thereby attracting buyers.
Additional Challenges for Tesla
The problem is not limited to stiff competition. Elon Musk’s questionable reputation among European consumers has dampened enthusiasm, while the updated Model Y has generated only moderate interest. Tesla has now added a new Performance trim to the lineup, but as the most expensive model in the range, it is unlikely to give sales a significant boost.
Growing Popularity of EVs in Europe
According to ACEA data, electric vehicle sales in Europe saw sharp growth in July. More specifically, BEVs grew by 39%, hybrids rose by 14%, and PHEVs increased by 57%, showing growing customer interest.
Year-to-date figures for the EU, EFTA, and UK regions paint a clear picture of the current trend. Sales of vehicles with electrified powertrains are growing between January and July 2025: +26% for BEVs (1,376,720 units), +25% for PHEVs (703,615 units), and +15% for hybrids (2,755,421 units).
In contrast, traditional fuel types are retreating. Gasoline sales fell by 21% to 2,193,273 units, and diesel decreased by 26% to 658,486 units. Despite these changes, the overall market remained stable at 7,900,877 units sold so far this year.
These trends indicate that the European electric vehicle market is becoming increasingly dynamic and competitive. Chinese manufacturers like BYD are demonstrating the ability to quickly adapt to demand by offering affordable and technologically advanced models, creating serious pressure on traditional leaders, including Tesla. The future of the market may largely depend on whether companies like Tesla can innovatively respond to these challenges, especially in the context of the growing popularity of hybrid technologies among European consumers.
