Tesla's UK sales plummet 60% in July: SMMT data

Tesla's UK sales dropped 60% year-over-year in July, according to SMMT data. The decline highlights challenges facing the electric vehicle maker in the European market.

Tesla's UK sales have experienced a significant downturn, dropping by 60% year-over-year in July, according to the latest data from the Society of Motor Manufacturers and Traders (SMMT). This decline underscores the challenges faced by the electric vehicle (EV) maker in the European market.

The once-dominant Tesla has been facing increasing competition from traditional automakers and new Chinese brands. The European EV market has seen a notable shift, with a 23% year-over-year increase in overall sales, reaching 361,000 units in June. However, the growth is not evenly distributed among all EV types. While pure battery-electric vehicles (BEVs) saw a 16% increase, plug-in hybrid electric vehicles (PHEVs) surged by 40% [1].

The resurgence of PHEVs is driven by competitively priced models that offer a practical bridge for consumers not yet ready to fully commit to electric vehicles. For example, the BYD Seal U, a midsize SUV, has been a runaway success with a starting price just under £34,000, providing a combined 217 horsepower and a usable 50 miles of all-electric range [1].

Volkswagen is also seeing growing sales with its new Tiguan PHEV, which delivers over 62 miles of electric range and offers DC fast charging. These developments suggest that the EV market is diversifying, offering a wider variety of vehicles beyond the ever-so-popular crossover segment [1].

Tesla's struggles are evident in the company's European sales figures. The Tesla Model Y, Europe's best-selling EV, managed to secure the top sales spot in June with 24,073 registrations. However, the Tesla Model 3, the company's electric sedan, saw its sales drop by 48% compared to June last year, with only 10,807 units sold [1].

The company's focus and discounts on the German-made Model Y have seemingly redirected attention away from the Model 3, leading to a loss of ground in the market. Meanwhile, European automakers are stepping up with compelling electric cars of their own. Skoda, for instance, has a certified hit with its new Elroq, logging 9,825 registrations in June. The funky Renault 5 and its sporty cousin, the Alpine A290, are also carving out their own niche with 7,788 combined sales [1].

After a three-year reign, Tesla has lost its crown as Europe's top-selling EV manufacturer. Volkswagen has claimed the top spot with an 11.2% market share, while Tesla has fallen to fourth place with just 6.1%. BMW and Mercedes-Benz hold the second and third positions, respectively. The Chinese automaker BYD is quickly gaining a new audience as well, capturing 4.1% of the market [1].

The decline in Tesla's UK sales coincides with a broader trend of increasing competition from Chinese EV brands. These brands have made notable gains in the European automotive market, despite efforts by European leaders to resist what they have labeled as a flood of cheap Chinese EVs. In the first half of 2025, Chinese brands accounted for 5.1% of new vehicle registrations across 28 European countries, nearly doubling their share from the previous year [2].

The rise of Chinese brands reflects dramatic changes in consumer perceptions. While a decade ago Chinese cars were seen as inferior or unsafe, in the current market they are winning top marks in major Swedish auto publications, and companies like XPeng, Nio, and Geely's Zeekr Automotive have flagship locations in Stockholm [2].

Tesla's new registrations across Europe declined by over 33% in the first half of 2025, falling from more than 102,000 units in the first half of 2024 to just 68,801 in the first half of 2025. In the European Union alone, Tesla sold 70,655 vehicles in the first half, a year-over-year decline of 44% [2].

The fallout from Elon Musk’s political presence, regulatory hurdles, and tough competition from Chinese and European brands are all contributing to Tesla's perfect storm of adversity on the continent. Musk has stated that the company’s European sales would “significantly” improve once Tesla can fully deploy its semi-autonomous Full Self-Driving (FSD) software [3].

Different legal frameworks have partly contributed to FSD approval in the European Union (EU) taking longer than Tesla would like, as the EU requires a more precise definition of who’s at fault in a self-driving crash. Tesla also needs approval from each country, and different nations have varying opinions on autonomy. The EU generally limits self-driving approval to Level 2 systems, aligning with FSD. While Mercedes-Benz became the first automaker allowed to enable Level 3 autonomy in the EU, it’s only approved on the highway at a lower speed than the autobahn’s average pace [3].

In conclusion, Tesla's UK sales decline highlights the challenges the company is facing in the European market. The rise of PHEVs and increased competition from Chinese brands are contributing factors. As Tesla awaits regulatory approval for its FSD software, it will be crucial to see how these developments impact the company's sales performance in the coming months.

References:
[1] https://www.arenaev.com/europes_ev_market_shifts_gears_as_tesla_loses_grip-news-4977.php
[2] https://seekingalpha.com/news/4477671-ev-shocker-european-demand-for-chinese-electric-vehicle-brands-is-stronger-than-anticipated
[3] https://autos.yahoo.com/articles/tesla-won-t-sales-figures-160000311.html