Tesla sales fell 27.9% to 13,863 units in the combined European Union, Britain, and the European Free Trade Association in May 2025 versus the same month in 2024, according to CNBC. It was the fifth consecutive month for the automaker's numbers to drop in the region. The decrease in deliveries was even more dire because battery-electric vehicle volume in the area increased 25% year-over-year in the region, according to the latest statistics from the European Automobile Manufacturers’ Association (ACEA). These figures mean that Tesla's stats dropped nearly the same amount as the EV market grew in the area.
Tesla sales have dropped 37.1 percent in Europe from January through May 2025. The company delivered just 76,459 vehicles in the region during that time. Even worse, the automaker's market share there fell to 1.2% from 1.8% at the beginning of 2025, according to Reuters.
The hard times for Tesla are happening while electrified vehicles become increasingly popular in Europe. The ACEA market report for May 2025 shows that EVs now account for 15.4% of the EU's vehicle market, and hybrids are 35.1% of the region's cars. PHEVs are 8.2% of registrations. In contrast, combustion-powered vehicles are losing popularity in the EU. Gasoline-powered cars are now 28.6% of new car registrations in the region, down from 35.6%. The market share of diesel-powered automobiles is now just 9.5%.
"By the end of May 2025, petrol car registrations had declined by 20.2%, with all major markets experiencing decreases. France experienced the steepest drop, with registrations plummeting by 34.3%, followed by Germany (-26.1%), Italy (-15.4%), and Spain (-13.3%)," the ACEA stated in its market report.
There isn't an obvious, singular reason for Tesla's struggles in Europe in 2025. Company boss Elon Musk's political activities might be part of the reason that buyers there are turning away from the company. However, there are other major factors to consider. For example, industry analyst JATCO has a report showing the growth in popularity of Chinese brands in Europe, with their market share already nearly doubling in the past year. Most notably, BYD only sold 40 fewer vehicles than Tesla in May.
"Despite the EU’s imposition of tariffs on Chinese electric vehicles, its car brands continue to post strong growth across Europe. Their momentum is partly due to their decision to push alternative powertrains, such as plug-in hybrids and full hybrids, to the region."
-Felipe Munoz, Global Analyst at JATO Dynamics.
In addition, established European automakers are working to become more competitive against Tesla. For example, BMW is betting big on the upcoming family of Neue Klasse EVs, starting with a sedan and SUV. The new models feature a fresh styling language, a high-tech cabin, and a cutting-edge powertrain.
Meanwhile, Mercedes-Benz has the new, electrified CLA-Class offering a 492-mile range in the WLTP test and an 800-volt electrical system. The automaker is also teasing an upcoming electric super sedan that might use the company's axial flux motors, potentially offering over 1,000 horsepower.
We look forward to seeing how Tesla weathers this storm. The company is trying to build a robotaxi business, and there are recent updates to the Model S and Model X. Plus, a new Model Y Performance is under development. The work suggests the automaker is trying to turn things around.
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