Tesla Sales Plummet in Europe Amid BYD's Rise and Musk Backlash

Tesla's European sales dropped for the 8th consecutive month in August due to growing competition from BYD and other automakers, as well as consumer backlash against Elon Musk's political affiliations. While Tesla saw modest gains in Norway, Spain, and Portugal, declining registrations, a limited lineup, and falling secondhand car prices continue to challenge the US EV giant. BYD dominates the European EV market.

JAKARTA - Tesla's dominance in the European electric car market is starting to wobble. The sale of the car made by Elon Musk's company has continued to decline for eight consecutive months until last August. This condition was triggered by intense competition from China's and conventional automotive manufacturers, as well as negative consumer sentiment towards the CEO's political actions [1].

According to Reuters, a significant decline was seen in several European countries. In France, Tesla's new car registration fell 47.3 percent in August compared to the previous year. In Sweden, the decline was even more drastic, reaching 84 percent, while Denmark fell 42 percent. Although the newly launched Model Y was expected to boost sales, the data showed no positive impact [1].

Analysts attribute this decline to several factors. First, the Tesla product line is considered old. Since launching Model Y in 2020, Tesla has not released a new mass model. Meanwhile, competitors, especially from China, continue to flood the market with a variety of fresh, more competitive models. Matthias Schmidt, a European automotive market analyst, called this condition a "more competitive market environment" [1].

Another factor that is no less important is the controversy surrounding Elon Musk. A survey from Electrifying.com shows that more than half of respondents are reluctant to buy Tesla because of Musk's increasingly divisive political influence [1].

Apart from competition and politics, the resale value of the used Tesla car is also a problem. After Tesla drastically cut the price of new cars since 2023, the price of used cars has also fallen. This makes many potential buyers switch to the used car market which offers a much cheaper price, than buying new cars [1].

Despite facing tough challenges in much of Europe, Tesla still recorded a 21.3 percent spike in sales in Norway. However, even there, competitors from China, such as BYD, showed much more rapid growth with a registration spike of up to 218 percent [1].

This situation indicates that fighting for the European electric vehicle market is heating up and is no longer dominated by just one player. Moreover, specifically for BYD in Europe, it managed to increase sales by more than 200 percent in July and more than 250 percent during the first seven months of 2025 [1].

Tesla’s struggle in the European market deepened in July, as the EV pioneer suffered another steep sales decline despite efforts to refresh its lineup. Tesla delivered 8,837 vehicles across the EU, the EFTA trade bloc, and the UK last month—a 40% drop from 14,769 units in July 2024, according to data released by the European Automobile Manufacturers Association (ACEA). This marked Tesla’s seventh consecutive month of shrinking market share, with its share squeezed to 0.8% from 1.4% a year earlier [3].

Meanwhile, Chinese rival BYD continued its rapid ascent. The Shenzhen-based automaker more than tripled its European sales year-on-year in July, delivering 13,503 vehicles compared with 4,151 a year earlier—a 225% increase—boosting its market share to 1.2% and leaving Tesla behind for another month [3].

The broader European auto market showed resilience. New car sales rose 5.9% in July to 1.085 million vehicles, buoyed by an 11.1% jump in Germany, which offset declines in the UK (-5%), France (-7.7%), and Italy (-5.1%). Spain (+17.1%), Poland (+16.5%), and Austria (+31.6%) also posted strong gains [3].

Electrification continued to accelerate. In the first seven months of 2025, 1,011,903 new battery-electric vehicles were registered across the EU, accounting for 15.6% of the market. Hybrid-electric vehicles proved even more popular, with 2,255,080 units sold so far this year, nearly 35% of the EU market, supported by strong growth in France, Spain, Germany, and Italy [3].

Despite this robust demand, European carmakers face mounting challenges. ACEA CEO Ola Kaellenius and other industry leaders recently warned Brussels that EU climate targets—including a 100% cut in CO2 emissions from cars by 2035—are no longer feasible. Automakers have already booked multi-billion-dollar losses and issued profit warnings, with several also citing the impact of U.S. tariffs [3].

References:
[1] https://voi.id/en/otoinfo/510773
[2] https://www.newsbreak.com/the-cool-down-314855763/4209148475617-tesla-unveils-new-model-that-could-be-waymo-killer-though-elon-musk-says-it-might-not-ever-be-sold-in-us
[3] https://www.ainvest.com/news/tesla-sales-europe-outstripped-chinese-rival-byd-sluggish-demand-musk-tarnished-reputation-2508/