Tesla’s European Sales Plunge Amid Rising Competition and Controversy

Tesla’s European market is facing a steep decline, with vehicle sales dropping significantly across key countries in 2025. In May, registrations fell 29% in Spain, 68% in Portugal, 67% in France, and 54% in Sweden, while April saw a 46% year-on-year drop in Germany and a 62% collapse in the UK, marking the lowest levels in over two years, according to data from the European Automobile Manufacturers Association (ACEA).

Despite a robust 213% sales surge in Norway driven by the revamped Model Y, Tesla’s overall European performance lags behind a thriving electric vehicle (EV) market, fueled by aggressive competition from Chinese manufacturers like BYD and European automakers.

Industry analysts point to Tesla’s limited model lineup and CEO Elon Musk’s polarizing political activities as key factors, raising questions about the company’s ability to regain its foothold in Europe’s rapidly evolving EV landscape.

A Deepening Sales Crisis

Tesla’s European sales have plummeted for five consecutive months, with May 2025 data showing a 49% year-on-year decline across the EU, UK, Norway, and Switzerland, totaling just 7,261 vehicles, per ACEA figures.

France reported a 67% drop to its lowest registrations since July 2022, while Germany’s 885 new Tesla registrations in April marked a 46% decline, despite the presence of Tesla’s Berlin Gigafactory.

The UK saw a 62% fall, with only 512 vehicles registered in April, according to the Society of Motor Manufacturers and Traders. Norway’s 2,600-unit surge in May, driven by the updated Model Y, stands as an outlier, though analysts note this drop compares against a weak May 2024.

Tesla’s aggressive incentives, including zero-interest financing, have failed to reverse the trend outside Norway, with Quentin Wilson of FairCharge warning that the brand’s reliance on just the Model Y and Model 3 spells trouble for its future.

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EV Market Thrives Amid Tesla’s Struggles

The European EV market is booming, with battery-electric vehicle (BEV) sales rising 26.4% in the first four months of 2025, capturing a 15.3% market share, per ACEA data. Plugin vehicle registrations, including hybrids, jumped 28% year-over-year in April to 282,000 units, despite stagnant overall car sales.

Chinese manufacturers like BYD are gaining ground, with 7,231 BEVs registered in April, surpassing Tesla’s 7,165 units for the first time, according to JATO Dynamics. European automakers are also stepping up, with Volkswagen reporting a 180% BEV sales increase and BMW achieving a 64% rise in Q1 2025.

Meanwhile, petrol and diesel vehicle sales fell 22% and 25%, respectively, reflecting the EU’s push toward electrification, though the current BEV share remains below the 30% target set for 2025.

Did You Know?
Tesla’s Berlin Gigafactory, designed for an annual capacity of 500,000 vehicles, registered only 885 new vehicles in Germany in April 2025, raising concerns about underutilization.

Chinese Manufacturers’ Rising Influence

China’s automotive sector is reshaping the global EV market, with companies like BYD leading the charge. In 2025, China’s automobile manufacturing exports are projected to grow 15.3%, bolstered by a 6.6% year-on-year increase in overall manufacturing production in April, per recent industry reports.

BYD’s European sales surged 94% in February, and its global sales hit 4.27 million vehicles in 2024, closing in on Ford’s 4.5 million. Unlike Tesla, which faces backlash over Musk’s political ties, including his support for far-right European parties and his role in the Trump administration, Chinese brands are capitalizing on affordable models and rapid innovation.

Protests and vandalism targeting Tesla dealerships in Sweden, the Netherlands, and Germany have further eroded consumer confidence, with a survey indicating 94% of Germans would not buy a Tesla in 2025, amplifying the company’s challenges.