Tesla (TSLA) Stock: European Sales Crash 34% as Chinese Rivals Motor Ahead

TLDR

Table of Contents

Tesla’s European sales plummeted 34% year-to-date through July, with July alone showing a 40% drop to 8,837 vehicles
Chinese rival BYD outsold Tesla in Europe for July, with registrations more than tripling to 9,698 units in the EU
Tesla’s European market share fell from 11% to 5% in July, while overall EV sales in the region grew 34%
Tesla stock dropped 0.6% in premarket trading despite previous gains from AI and robotaxi developments
The sales decline comes as Tesla refreshes its lineup and plans to introduce a lower-cost Model Y variant later in 2025

Tesla faces mounting pressure in European markets as new sales data reveals the electric vehicle maker lost substantial ground to Chinese competitors in July. The company’s struggles come at a time when the broader European EV market is actually growing.

🚨TESLA SALES IN EUROPE SINK 40% IN JULY, REGISTRATION DATA SHOWS
Europe is a bad place for Tesla $TSLA. 🇪🇺 pic.twitter.com/bEl29GoIhJ
— Jesse Cohen (@JesseCohenInv) August 28, 2025

Tesla sold just 8,837 vehicles across Europe in July. This marked a steep 40% decline from the same month last year. The poor performance extends a troubling trend for the company.

Through the first seven months of 2025, Tesla’s European sales dropped 34%. The company sold 119,013 vehicles compared to 179,338 in the same period of 2024. This represents a loss of over 60,000 unit sales.

The decline is particularly concerning because the European EV market is expanding. Overall battery electric vehicle sales in the region jumped 34% to 186,440 units in July. Tesla’s market share collapsed from 11% to just 5% in a single month.

Chinese automaker BYD emerged as Tesla’s biggest threat. BYD’s new car registrations in the EU more than tripled year-over-year to 9,698 units in July. When including the UK and other European countries, BYD’s total reached 13,503 vehicles.

Chinese Competition Heats Up

BYD isn’t Tesla’s only problem. State-owned Chinese automaker SAIC Motor also outsold Tesla in July. These Chinese companies are expanding aggressively with lower-cost models that offer competitive features.

The competitive pressure shows in Tesla’s market position. Year-to-date, Tesla’s share of European EV sales dropped about 8 percentage points to roughly 8%. This represents a massive loss of market presence in a key global region.

Other established automakers managed to post growth during the same period. Volkswagen and other European brands logged increases while Tesla lost share in a rising market. This suggests Tesla’s problems are competitive rather than related to overall market conditions.

Tesla had expected sales to recover this year. The company updated its popular Model Y, which is Tesla’s best-selling model globally. However, this sales recovery has not materialized in European markets.

Global Sales Pressures Mount

Tesla’s European woes reflect broader global challenges. In the first half of 2025, Tesla sold 720,803 vehicles worldwide. This represented a 13% decline from the previous year. The company hasn’t posted growth in Europe since December 2023, when it managed a modest 5.9% increase.

Tesla plans to introduce a lower-cost Model Y variant later in 2025. This move could help boost demand, but investors remain focused on the company’s AI initiatives rather than traditional vehicle sales.

The stock showed resilience in premarket trading Thursday. Shares fell just 0.6% to $347.60 despite the disappointing European data. This muted reaction reflects how investor priorities have shifted toward Tesla’s artificial intelligence projects.

Tesla launched an AI-trained self-driving taxi service in Austin, Texas in June. The stock gained 46% between the company’s October robotaxi event and the service launch. This jump added approximately $350 billion in market value.

Tesla stock remains down 13% for 2025 but has gained 70% over the past 12 months. The divergence between vehicle sales performance and stock price shows how much investors value the company’s AI potential over traditional auto metrics.

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