TLDR
- Tesla sales dropped 86% in Sweden, 52% in Denmark, and 27% in France during July, marking seven consecutive months of decline
- The company has stopped taking orders for Model S and Model X vehicles across European markets, leaving only inventory models available
- Tesla faces increased competition from Chinese EV manufacturers and regulatory challenges with autonomous driving features in Europe
- CEO Elon Musk warned of “a few rough quarters” ahead due to lack of affordable vehicles and upcoming end of US tax incentives
- The company introduced a new software feature that syncs interior lighting with music as part of its latest update
Tesla’s European operations hit another rough patch in July as sales continued their downward spiral across key markets. The electric vehicle maker posted its seventh consecutive month of declining sales in Sweden, Denmark, and France.
Swedish sales fell 86% year-over-year to just 163 vehicles in July. Denmark saw a 52% drop to 336 cars, while France recorded a 27% decline to 1,307 vehicles.
The sales slump comes as Tesla grapples with multiple headwinds across European markets. Competition from Chinese EV manufacturers has intensified, putting pressure on Tesla’s aging vehicle lineup.
Adding to the company’s challenges, Tesla has quietly removed ordering options for two of its premium models in Europe. The Model S and Model X are no longer available for custom orders across European markets including Italy, France, and Germany.
Only inventory versions of these vehicles remain available for purchase. The Model 3 and Model Y continue to offer full configuration options for European buyers.
Production Challenges Mount
Tesla delivered just 10,394 “other” models, which includes the Model S, Model X, and Cybertruck, in the latest quarter. The low numbers suggest Tesla may be cutting supply of vehicles with weak demand.
However, this isn’t the first time Tesla has suspended orders for certain models. The company has previously halted ordering when lead times grow too long, allowing production to catch up with demand.
CEO Elon Musk acknowledged during earnings calls that Tesla faces regulatory hurdles in Europe. Tough automated driving regulations make it harder to sell the Model Y in some countries.
“Our sales in Europe, we think will improve once we are able to give customers the same experience that they have in the U.S.,” Musk told analysts. He noted that supervised self-driving capability serves as “a huge selling point” for the Model Y.
New Features Aim to Attract Buyers
Tesla rolled out a new software update that might help attract customers. Version 2025.26+ introduces “Sync Accent Lights w/Music” for vehicles with interior ambient lighting.
The feature transforms the car’s interior into a light show that pulses and changes color with the music. It’s available through Tesla’s Toybox entertainment system.
While not a performance enhancement, the feature adds novelty value that could influence buying decisions. Tesla needs more buyers as it works through current market challenges.
Model Y registrations in Sweden and Denmark fell 88% and 49% respectively in July. The broader European car market showed mixed results, with French sales down 8% while Danish and Swedish sales rose 20% and 6%.
Tesla is preparing to launch a revamped Model Y and plans to produce a new, cheaper model. However, production of the affordable vehicle won’t ramp up until next quarter, later than initially expected.
Musk warned shareholders in July that Tesla could face “a few rough quarters” ahead. The warning comes as the company lacks affordable vehicles and faces the upcoming end of a $7,500 US tax break for EV buyers.
The company launched a trial robotaxi service in Austin, Texas using Model Y SUVs controlled by autonomous-driving software. However, the rollout of self-driving features elsewhere in the US remains stalled due to permit delays.
Other European countries including Italy, Norway, and Spain are expected to release July car sales data later, which could provide additional insight into Tesla’s European performance.
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