TLDR
- Tesla’s European Union sales dropped 37% year-over-year in August, selling only 8,220 vehicles
- Chinese rival BYD outsold Tesla in the EU for the second straight month with 9,130 cars, up 201%
- Tesla stock fell 4.4% on Thursday following the disappointing European sales data
- Global Tesla sales declined 13% in the first half of 2025, selling 721,000 vehicles
- Despite the slump, RBC analysts expect Tesla Q3 deliveries could reach 456,000 vehicles
Tesla stock took a beating Thursday, dropping 4.4% to close at $423.39 after new data revealed the electric vehicle maker’s struggles in Europe continue to deepen.
The European Automobile Manufacturers’ Association released August sales figures that painted a grim picture for Tesla. The company sold just 8,220 vehicles in the European Union, marking a steep 37% decline from the same period last year.
Chinese competitor BYD capitalized on Tesla’s weakness, selling 9,130 cars in the EU during August. That represents a massive 201% increase year-over-year for the Chinese automaker.
This marks the second consecutive month that BYD has outsold Tesla in the crucial European Union market. The competition between the two EV giants has intensified as Tesla’s product lineup ages and new rivals emerge.
When including the broader European market with the U.K., Norway, and other European Free Trade Association countries, Tesla maintained a slim edge. The company sold 14,831 cars compared to BYD’s 11,455 vehicles, but Tesla’s sales still dropped 22% year-over-year.
Market Share Battle Intensifies
For the year so far, Tesla has sold 133,857 cars in the expanded European market, down 33% from 2024. BYD has moved 95,940 vehicles, representing a staggering 280% increase.
The poor European performance reflects Tesla’s broader global challenges. In the first half of 2025, the company sold 721,000 cars worldwide, down about 13% from the previous year.
Wall Street expects Tesla to deliver approximately 447,000 vehicles in the third quarter. That would represent a 3% decline from the 463,000 vehicles sold in Q3 2024.
Tesla’s struggles stem from multiple factors. Increased competition has eaten into market share while the company’s aging product lineup fails to excite buyers like it once did.
Political Controversies Impact Brand
Elon Musk’s political activism has also hurt Tesla’s appeal among traditionally loyal customers. Many environmentally conscious buyers have grown uncomfortable with the CEO’s public positions.
Earlier this year, Musk endorsed Germany’s far-right AfD party. He also appeared via video at an anti-immigrant rally in the U.K. that turned violent.
British Prime Minister Keir Starmer criticized Musk for “dangerous” comments made at the rally. Twenty-six police officers were injured during the event.
Despite these headwinds, some analysts remain optimistic about Tesla’s near-term prospects. RBC expects the company could deliver 456,000 vehicles in Q3, beating consensus estimates.
The analysts point to a potential rush of U.S. buyers looking to secure EVs before a $7,500 federal tax credit expires at the end of September. This could provide a temporary boost to Tesla’s numbers.
Tesla shares have recovered somewhat from their brutal first quarter performance. The stock is now up 5% for 2025 after plunging 36% in the opening three months of the year.
Coming into Thursday’s trading session, Tesla had gained 27% over the previous 10 trading sessions. The stock remains up about 74% over the past 12 months despite recent volatility.
The overall European EV market showed strength in August, with electric vehicles comprising nearly 16% of new car sales. Total EV registrations rose 26% compared to August 2024, while petrol and diesel vehicle sales declined more than 20%.
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