Tesla’s struggles in the European market deepened in July, with sales plummeting 40% year-over-year to a total of 8,837 vehicles. This marks the seventh consecutive month of declining sales for the electric vehicle giant, a stark contrast to the performance of its Chinese rival, BYD, which experienced a remarkable 225% surge in registrations, reaching 13,503 units. These figures, released by the European Automobile Manufacturers Association (ACEA), highlight the growing dominance of Chinese automakers in the European market.
The downturn for Tesla occurs despite a general increase in overall battery electric vehicle sales across Europe. Analysts attribute Tesla’s difficulties to a confluence of factors, including increasingly fierce competition, particularly from Chinese brands aggressively expanding their presence in the region. Further compounding the issue is the negative reputational impact stemming from CEO Elon Musk’s controversial public statements and his ties to the Trump administration. This has arguably damaged consumer confidence in the brand.
Adding to Tesla’s woes is the aging nature of its current vehicle lineup. The company has acknowledged the need for a refresh, announcing plans for a more affordable electric vehicle with volume production slated for the second half of 2025. However, industry experts, such as Thomas Besson of Kepler Cheuvreux, suggest that Tesla’s management is diverting attention away from these critical automotive concerns by emphasizing other ventures like artificial intelligence, robotics, and autonomous driving technologies. Besson highlighted the age of Tesla’s vehicles as a significant factor contributing to the slowdown in sales.
The impact of Chinese competition extends beyond Tesla. Several established automakers, including Stellantis, Hyundai, Toyota, and Suzuki, also reported year-on-year sales declines in July. In contrast, Volkswagen, BMW, and Renault saw positive growth, suggesting a broader shift in market dynamics. The growing presence of Chinese manufacturers highlights the increasing challenges faced by traditional and emerging players in the fiercely competitive European automotive market.
