Tesla Inc (NASDAQ:TSLA) experienced a sharp decline in both sales and market share across Europe in July, according to data released Thursday by the European Automobile Manufacturers’ Association (ACEA), even as overall electric vehicle demand in the region continued to grow.
Chinese rival BYD Co (USOTC:BYDDY), appearing in the ACEA monthly data for the first time, outperformed Tesla, capturing a larger share of the market.
ACEA reported that Tesla’s total new car registrations across the European Union, the Europe Free Trade Association, and the UK fell 40.2% year-on-year to 8,837 units. The association, comprising 15 major European automakers, serves as the primary lobbying and standards body for the region’s auto industry.
Tesla’s market share in Europe dropped further to 0.8% from 1.4% a year earlier, with cumulative January-to-July sales down 33.6% from the same period in 2024.
This decline came despite a 33.6% increase in total battery electric vehicle (BEV) sales in Europe during July. BEVs now represent roughly 15.6% of the European car market, trailing petrol vehicles at 28.3% and hybrid EVs at 34.7%.
The July data underscores Tesla’s ongoing struggles in the region as competition intensifies from European and Chinese manufacturers. BYD, for example, sold 13,503 units in Europe last month, securing a 1.2% market share. Its hybrid models appeal to more price-sensitive buyers, and high European import tariffs on Chinese vehicles have not significantly dampened consumer interest.
Tesla’s refreshed Model Y, released earlier this year, failed to meaningfully lift sales, while European automakers — many of whom have ramped up their EV offerings in recent years — further increased competitive pressure.
Tesla’s brand image has also faced challenges this year, reportedly affected by CEO Elon Musk’s support for U.S. President Donald Trump and his links to a German far-right party, triggering consumer boycotts across Europe and the U.S.
During Tesla’s Q2 earnings call in late July, Musk acknowledged the hurdles, stating the EV maker faces a “few rough quarters,” with the phase-out of U.S. EV tax credits adding to the challenges.
Still, Musk emphasized Tesla’s future growth areas, highlighting artificial intelligence, autonomous driving, and robotics as key drivers moving forward.
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