Tesla’s Europe Slump Deepens as BYD Surges

By Editorial Dept - Sep 01, 2025

Tesla’s European slump deepened in August as tougher competition and brand headwinds weighed on sales, with a few notable exceptions.

Registrations fell sharply across several key markets: France (-47.3% year over year while the overall market rose 2.2%), Sweden (-84% with EV sales flat and the market up 6%), Denmark (-42%), the Netherlands (-50%), and Italy (-4.4%). Norway bucked the trend—Tesla registrations rose 21.3%—but BYD surged 218% there. After seven consecutive monthly declines, Portugal saw a 28.7% Tesla uptick. In Spain, where EV subsidies can reach €7,000, Tesla deliveries jumped 161% to 1,435, yet BYD outpaced it with more than 400% growth to 1,827. Year to date in Spain, BYD sales are up 675% (14,181 units) versus Tesla’s 11.6% (9,303).

Analysts point to a tougher landscape and an aging lineup. Tesla hasn’t launched a new mass-market model since the Model Y in 2020, while Chinese entrants and legacy automakers flood showrooms with fresh EVs. Schmidt Automotive notes Europe-wide market share for Tesla in Western Europe slid to 1.7% in H1 2025 from 2.5% in 2024, calling Elon Musk’s July claim of “no issues” on volumes out of step with reality. Tesla previously blamed a production shift to a refreshed Model Y, but August data still showed steep Model Y declines in Denmark (-46.5%) and Sweden (-87%).

Brand perception is an added drag. Elon Musk’s polarizing politics—support for Donald Trump and European far-right parties—have sparked a consumer backlash. EV site Electrifying.com says over half of surveyed buyers are put off purchasing a Tesla because of Musk.

Aggressive 2023 price cuts have also depressed residual values, swelling the used market and undercutting new-car pricing power. U.K. tracker Marketcheck reported record used-Tesla sales in July (+270%) and a new low for average used Model Y prices.

Meanwhile, supply dynamics favor rivals. BYD continues to scale rapidly across Europe, capitalizing on the breadth of its lineup and sharp pricing. With competition intensifying and secondhand values under pressure, Tesla’s path back to growth in Europe likely hinges on new product, steadier pricing, and rebuilding brand appeal.