Sales figures for Tesla vehicles in both the UK and Germany demonstrating a persistent downtrend
Tesla, the world's leading electric vehicle (EV) manufacturer, has recently introduced an upgraded version of its most popular vehicle globally, the Model Y. However, this update hasn't been enough to stem the sales decline the company is experiencing in key European markets.
The sales slump in Europe can be attributed to several factors. The refreshed Model Y has failed to boost sales, with new registrations falling sharply in many countries like Sweden (-88%) and Denmark (-49%). Moreover, increasing competition from other EV manufacturers offering more attractive or affordable alternatives, including local players, has challenged Tesla's market share. Additionally, polarization of Tesla's public image and CEO Elon Musk's controversies have alienated some European consumers, contributing to declining sales.
Specific markets have seen steep declines. For instance, Tesla registrations are down 41.6% overall in July 2025, with Germany facing a decline from over 60,000 vehicles sold a few years ago to an expected 20,000 units this year, and the UK witnessing a 60% decrease in July 2025 compared to July 2024.
In contrast, BYD, a Chinese EV manufacturer, is experiencing significant growth in the same European markets. This growth can be attributed to offering more affordable and diversified EV models that appeal to European consumers looking for alternatives to Tesla. BYD has also capitalised on Tesla's faltering presence and demand vacuum in many countries and possibly better alignment with market incentives and financing options that support EV adoption.
The success of BYD is evident in the data. In July 2024, BYD posted a nearly 390% year-over-year increase in registrations in Germany, overtook Tesla in monthly European EV sales earlier this year, and sold 3,184 vehicles in the UK, more than four times its sales from the same month last year. BYD now ranks among the top 10 automakers in Europe, continuing its aggressive expansion strategy in the region.
In South Korea, BYD's success is even more pronounced. The company set a new sales record for the month of July in South Korea, with the Model Y being the best-selling imported vehicle for the third straight month.
The downturn in Tesla's sales can be attributed to rising competition, shifting consumer sentiment, and lingering reputational challenges linked to Musk's political commentary and affiliations. The Society of Motor Manufacturers and Traders (SMMT) released figures showing Tesla's decline in the UK market, while the Federal Motor Transport Authority (KBA) reported Tesla's sales decrease in Germany. Year-to-date Tesla sales in Germany have decreased by 57.8% compared to the same period in 2023.
Despite these challenges, Tesla continues to be a significant player in the EV market. However, the success of companies like BYD underscores the importance of continuous innovation, strategic positioning, and alignment with consumer preferences and market dynamics.
- The significant growth of BYD, a Chinese EV manufacturer, in European markets can be attributed to their offering of more affordable and diversified EV models, capitalizing on Tesla's faltering presence and demand vacuum, and possibly better alignment with market incentives and financing options.
- In contrast to Tesla's declining sales, technology headways in the automotive industry have enabled companies like BYD to develop competitive EV models, garnering them popularity among European consumers and contributing to increased sales.
- The finance sector plays a crucial role in promoting EV adoption, as local companies, like BYD, that provide affordable and diversified EV models may be better positioned to secure appropriate financing opportunities, thus generating greater market share and success.
