Sales of Tesla vehicles have taken a major hit in Europe and the United States, putting pressure on Elon Musk‘s electric vehicle brand as rivals continue to surge ahead in critical markets.
Data from the European Automobile Manufacturers Association reveal that Tesla’s July 2025 sales dropped sharply, while Chinese and U.S. automakers made significant gains.
Newsweek reached out to Tesla via email for comment.
Why It Matters
Tesla’s latest performance marks the company’s seventh consecutive monthly decline in Europe, a key region in the global electric vehicle race. Despite rising overall sales of battery-electric vehicles, Tesla’s numbers moved in the opposite direction, signaling deeper operational and reputational challenges.
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What To Know
According to ACEA, battery-electric vehicles accounted for 15.6 percent of all new European Union car registrations through July 2025, up from 12.5 percent the year prior.
But Tesla’s performance lagged behind this growth, putting it at risk of ceding long-term market share to aggressive rivals like BYD, which is expanding rapidly with competitive pricing and new models across Europe.
Tesla saw a 40 percent year-over-year drop in new vehicle registrations across Europe in July, registering just 8,837 vehicles.
At the same time, Chinese automaker BYD, one of Tesla’s largest competitors in the electric car market, recorded a 225 percent spike, totaling 13,503 registrations during the month.
In the U.S., General Motors reported triple-digit growth in electric vehicle sales for the first half of 2025, as Tesla stumbled in its home market.
Tesla is facing multiple challenges contributing to its lagging sales. Among them is an aging vehicle lineup that has not seen a major refresh in recent years.
Meanwhile, BYD and other Chinese manufacturers continue to gain traction. BYD has opened new showrooms across Europe and offers aggressively priced models, helping it become the top-selling Chinese EV brand on the continent.
ACEA data show that battery-electric car registrations increased by 39.1 percent across the EU in July 2025 compared to July 2024. The growth is largely driven by strong performances in Germany (+38.4 percent), Belgium (+17.6 percent), and the Netherlands (+6.5 percent).
What People Are Saying
Russ Mould, Investment Director at U.K. investment platform AJ Bell, previously told Newsweek: “Elon Musk’s political dabbling may not have helped at the margin, but the real issue probably lies with competition, as the Chinese reap the benefits of their 10-year-old ‘Made in China’ programme, and the Europeans start to exercise greater influence in the EV market.”
Mould said that Tesla’s share price, up more than 75 percent in the past year, does not reflect any particular concern among investors, who “will no doubt welcome the return of more of Mr. Musk’s attention and energy.”
He added that Tesla’s $1 trillion market cap “looks to [be] pricing in a lot of hope and expectation for autonomous driving, robotics, AI and more.”
What Happens Next
Tesla has announced plans to introduce a more affordable EV model, with volume production slated for the second half of 2025. Investors hope this will reverse the declining trend, but the timeline puts pressure on the company to retain interest and market share in the interim.
