Tesla Faces Slumping European Sales as Global EV Market Shifts

By Editorial Dept - Jun 25, 2025 - Oilprice.com

Tesla’s recent robotaxi test in Austin has made headlines, but under the surface, cracks are appearing in its core business. New data from the European Automobile Manufacturers Association (ACEA) shows that Tesla’s electric vehicle (EV) registrations in Europe fell 27.9% year-over-year in May, to 13,863 units. This contrasts sharply with the broader EV market in the region, which grew 25% in the same period.

May marked Tesla’s fifth consecutive month of declining sales in Europe, though the drop was less severe than April’s 49% plunge. Year to date, Tesla's European registrations have fallen 37.1% to 75,196 units.

Country-specific data reported by Reuters paints an even grimmer picture. In France, new Tesla registrations dropped 67% in May; in Sweden, sales slid 53.7%; Denmark and the Netherlands saw drops of 30.5% and 36%, respectively; and Portugal suffered a dramatic 68% decline. Norway was the only market in the region where Tesla posted gains.

Market analysts suggest some of this weakness may be tied to CEO Elon Musk’s controversial political activity, which has alienated segments of Tesla’s customer base. His involvement with the U.S. Department of Government Efficiency (DOGE) and support for right-wing leaders in Europe have sparked criticism from both sides of the political spectrum. Though Musk has recently returned focus to his companies, analysts, including Wedbush’s Dan Ives, caution that reputational damage may linger.

Tesla doesn’t report monthly or regional sales, making its upcoming Q2 delivery report crucial. Wells Fargo’s Colin Langan expects Q2 deliveries to fall 21% year-over-year to 343,000 units—significantly below the Street's 411,000 estimate. The first quarter of 2024 already disappointed, with deliveries at 336,681, the lowest since Q2 2022.

Meanwhile, signs of slowing momentum are also emerging in China, where EV giant BYD has cut night shifts and scaled back production at several plants. Although BYD targets 5.5 million units this year, up from 4.27 million in 2023, the cuts suggest caution in the face of softening demand.

As competition intensifies and market sentiment shifts, Tesla's second-quarter results may reveal how resilient the company truly is in a maturing EV landscape.