UK and German Tesla sales witness a continuous drop
In a surprising turn of events, Tesla, the American electric vehicle (EV) giant, is experiencing a sharp sales decline across several key European markets, while its Chinese counterpart, BYD, is setting new sales records.
Last month marked the third consecutive month that the Model Y was the best-selling imported vehicle in South Korea. However, in Europe, the story is quite different. Tesla's registrations plummeted by 41.6% in July 2025, amidst a general surge in EV sales across the continent. Year-to-date, Tesla's sales dropped 34.3% overall in Europe, with sharper declines in Germany and France.
The precipitous drop in Tesla's European sales can likely be attributed to several interrelated factors.
Tesla's Declining Sales Despite Overall EV Growth
Despite the overall growth in the EV market, Tesla registrations in Europe have been on a downward trend. Germany, which once saw over 60,000 annual Tesla sales a few years ago, is projected to see just 20,000 in 2025. The UK's Tesla sales dropped by 60% in July 2025 compared to the previous year.
Model Y Revamp Fails to Boost Demand
Tesla had anticipated that the refreshed Model Y, launched in Europe in March 2025, would lift sales. However, the update failed to generate meaningful growth; in fact, Model Y registrations fell steeply in several key markets, including an 88% drop in Sweden and a 49% decline in Denmark. Norway was an exception, benefiting from 0% interest loans boosting Tesla sales there.
Increasing Competition from BYD and European Automakers
BYD, a Chinese EV maker, is expanding aggressively in Europe and is outpacing Tesla in registrations. Meanwhile, European automakers like Volkswagen, with models such as ID4, ID3, and ID7, are also pressing hard, providing more competitive alternatives. Other newcomers like Kia, Renault, and Skoda have introduced attractive EV models gaining market traction.
Market Dynamics in Major European Countries
Tesla faces especially pronounced declines in mature markets where alternatives have grown stronger. Several European countries exhibit heavy Tesla sales falls, such as Sweden (-86%), Denmark (-52%), Netherlands (-62%), and Belgium (-58%).
Local Incentives and Financing Options
Tesla's sales in some countries remain buoyed by favorable financing deals (as in Norway), whereas in markets without such incentives, Tesla struggles to compete effectively against builders offering competitive pricing and EVs suited to local preferences.
In stark contrast, BYD has been making significant strides in Europe. In July, the company set a new sales record in South Korea, and in the UK, BYD sold 3,184 vehicles, more than four times its sales from the same month last year. In Germany, BYD posted a nearly 390% year-over-year increase in registrations. As a result, BYD now ranks among the top 10 automakers in Europe.
In summary, Tesla's sharp decline in registrations in important European markets like the UK and Germany is largely due to its inability to maintain supply and consumer interest post-Model Y update, increased competition from both Chinese EV makers like BYD and established European brands, and varying financing/incentive environments. BYD's rapid growth is propelled by its competitive product offerings and aggressive market entry capitalizing on Tesla's weakening position.
Technology plays a significant role in the EV market, with Tesla's sales decline in Europe attributed to factors such as changing consumer preferences, increased competition, and shifting market dynamics. However, rival EV manufacturers like BYD are leveraging advancements in technology to set new sales records and outpace Tesla, demonstrating the evolving landscape of the EV industry.
