Tesla’s dominance in Europe’s electric vehicle market is collapsing. The U.S. EV giant suffered a staggering 40% sales drop in July, marking its seventh consecutive month of decline, while Chinese rival BYD is stealing the spotlight with a jaw-dropping 225% sales surge, according to figures released Thursday by the European Automobile Manufacturers Association (ACEA).
Tesla managed just 8,837 new registrations last month, down from more than 14,000 a year ago. BYD, by contrast, roared to 13,503 registrations, overtaking Tesla and signalling a seismic shift in Europe’s EV hierarchy.
Even more damning: the slump came as overall EV sales in Europe were rising, underscoring Tesla’s accelerating loss of momentum.
Musk faces a perfect storm
Industry watchers say the slide is no accident. Tesla is reeling from a lethal mix of fierce competition, an ageing lineup, and the fallout from Elon Musk’s polarising public image. The company hasn’t delivered a significant model refresh in years, while its highly publicised Cybertruck launch has failed to make a dent in Europe.
Globally, Tesla is also under pressure. Its auto revenue dipped in Q2, forcing Musk to warn of “a few rough quarters ahead.” A promised cheaper EV model by late 2025 could help, but for now, rivals are eating Tesla’s lunch.
“Tesla wants to be seen as an AI and robotics company,” said Thomas Besson, head of auto research at Kepler Cheuvreux. “But the truth is, its cars are ageing fast compared to competitors.”
China’s EV juggernaut is here
The real story, however, is China’s full-frontal assault on Europe’s EV market. BYD, backed by Warren Buffett, is expanding aggressively, opening new showrooms, undercutting rivals on price, and flooding the market with fresh models.
Chinese brands now command over 5% of Europe’s car market, a record high, according to JATO Dynamics. And they’re just getting started.
Tesla isn’t the only one under pressure. Global automakers like Stellantis, Hyundai, Toyota, and Suzuki also posted declines in July, while Europe’s homegrown champions Volkswagen, BMW, and Renault enjoyed gains.
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