Sales of Elon Musk’s Tesla have plunged by approximately 40% in Europe over the first half of 2025, according to new data from the European Automobile Manufacturers’ Association (ACEA).
The decline is just the latest effect from increased pressure from Chinese automakers—particularly BYD—that are gaining ground in the rapidly expanding electric vehicle (EV) market on the continent. But European consumers have also shown a dislike for Musk’s very visible politics, which may be making it a less preferred option in a market already saturated by EV choices.
Either way, it doesn’t look good for Tesla (TSLA).
“Tesla sales continue to be in hard reverse in Europe, suggesting Elon Musk’s divisive role in politics is still hurting the brand on this side of the Atlantic,” AJ Bell investment director Russ Mould told the Independent.
It’s not that Europeans aren’t buying electric vehicles, because they are, and at a record pace. ACEA’s figures show that EV sales across the European Union, the UK, and the EFTA region rose by 33.6 percent in July, indicating a significant surge in popular demand. It just means that Europeans are specifically not buying Teslas, creating another headache for a company that has seen its share price yo-yo over the last 12 months.
So how does this affect Tesla in general?
The new numbers mean that Tesla’s sharp decline has caused its market share to fall below 1%, as the company struggles with brand perception, pricing pressures, and a lack of new models to counter competition.
From January to July, Tesla’s sales dropped by more than a third compared to the same period last year, highlighting ongoing challenges as rivals introduce innovative offerings. Total battery EVs now comprise more than 15 percent of the European auto market, reflecting the sector’s rapid growth.
Meanwhile, Chinese automaker BYD sold 13,503 units in July, almost double Tesla’s 8,837, solidifying its position as the continent’s leading EV seller for the month. BYD recently surpassed Tesla in global revenue and launched a battery that can be charged in just five minutes, offering a competency edge in affordability and technology.
So who are Tesla’s main rivals in Europe?
Musk has some serious competition across the pond.
Other brands posting gains in July include Volkswagen and Skoda (both within Volkswagen Group), along with Vauxhall and Dacia.
Volkswagen remains the dominant player through the first seven months, with over 872,000 new registrations, a 5% compared to last year. Those are numbers highlighting its commitment to electric mobility as the industry shifts rapidly eastward.
One bright spot for Elon Musk
Jaguar, too, saw a rough time of it in Europe. Its EV sales nosedived by 99% after the company announced plans to relaunch exclusively as an electric-only brand in 2026, phasing out internal combustion models this year.