Tesla’s new car sales in Europe have fallen for the fifth consecutive month, as buyers increasingly turn to more affordable electric vehicles from Chinese manufacturers.
Data from the European Automobile Manufacturers Association shows that Tesla’s deliveries in the EU, UK, and European Free Trade Association dropped by nearly 28% year-on-year in May, totalling 13,863 units. This decline caused Tesla’s market share to shrink from 1.8% in May 2024 to just 1.2% this year.
Tesla’s challenges in Europe are compounded by reputational issues linked to CEO Elon Musk’s political activities, including his financial support for U.S. President Donald Trump and subsequent controversies that sparked protests at Tesla dealerships across Europe. Although Musk has since distanced himself from the Trump administration, the fallout continues to affect the brand.
Meanwhile, Chinese EV manufacturers are rapidly gaining ground despite EU tariffs. In May, Chinese brands sold 65,808 vehicles in Europe, more than doubling their market share to 5.9%, according to JATO Dynamics.
Felipe Munoz, a global analyst at JATO, said, “Despite the EU’s imposition of tariffs on Chinese electric vehicles, its car brands continue to post strong growth across Europe.” Chinese firms like BYD have nearly matched Tesla’s sales in May and surpassed it in April, thanks to a wide range of competitively priced EVs and hybrids.
Tesla had hoped its updated Model Y compact SUV would help reverse the sales decline, with some success in markets like Norway. However, rising competition and Tesla’s premium pricing have limited its impact elsewhere. Supply chain issues also continue to constrain Tesla’s ability to meet demand.
Despite Tesla’s struggles, the overall European EV market is expanding, driven by stricter emissions regulations and growing consumer interest in plug-in hybrids and fully electric vehicles. Established European carmakers such as Volkswagen, Renault, and BMW are intensifying their EV efforts, further increasing competition.