Tesla's European Sales Decline for Fifth Month Despite EV Market Growth

Tesla’s sales in Europe fell 27.9% in May 2025 compared to the same month last year, according to data from the European Automobile Manufacturers Association (ACEA). This decline comes even as the region saw a 27.2% jump in battery-electric vehicle (BEV) sales, suggesting Tesla is losing ground to rivals in a growing market, as per Reuters report.

The company’s newly updated Model Y, expected to rejuvenate its European performance, has so far not provided a noticeable boost.

Tesla's Market Share Shrinks as Competition Grows

Tesla’s market share in Europe slipped to 1.2% in May, down from 1.8% the year before. The drop comes amid rising competition, especially from Chinese EV manufacturers offering more affordable options.

Chinese brands nearly doubled their market share to 5.9%, selling over 65,800 vehicles in Europe in May, according to Jato Dynamics. This growth occurred despite the European Union imposing tariffs on Chinese EV imports.

Broader Auto Market Sees Modest Gains

Overall car sales in Europe including the EU, the UK, and the European Free Trade Association rose 1.9% in May to 1.11 million vehicles. Plug-in hybrids and alternative-fuel vehicles were key contributors to the growth.

However, in the EU alone, year-to-date car sales have declined by 0.6%, showing continued pressure in the market despite a surge in demand for electrified vehicles.

Shifts in Manufacturer Performance

While Tesla saw a sharp decline, other manufacturers fared better:

• SAIC Motor (China): Sales up 22.5%
• BMW (Germany): Sales up 5.6%
• Mazda (Japan): Sales down 23%

These figures highlight diverging fortunes across manufacturers, with legacy players and emerging Chinese firms finding more traction in the evolving European market.

EV Demand Continues to Rise in Europe

Electric and hybrid vehicle demand continues to strengthen. In May:

• BEV sales rose 26.1%
• Plug-in hybrids (PHEV) increased 15%
• Hybrid-electric vehicles (HEV) rose 19.8%

Together, these vehicle types accounted for nearly 59% of all new car registrations in the EU up from 49% a year ago.

Read More: India Launches EV Scheme Portal: Import Tax Cuts in Exchange for Local Investment.

Conclusion

Tesla’s continued slide in European sales underlines the mounting pressure from increasingly competitive Chinese EV makers and traditional automakers expanding their electric offerings. While EV adoption overall is on the rise, Tesla’s ability to maintain market share may depend on the success of its updated models and how it navigates pricing, politics, and consumer preferences in a shifting landscape.

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