Tesla Is Collapsing In Europe As BYD Skyrockets

• Tesla sales plunged 43.5% in the European Union in the first seven months of the year.
• BYD sales grew 250% in the same period.
• CEO Elon Musk’s far-right politics continue hurting the brand.

Tesla was once the best-selling electric vehicle brand in Europe. But now, the American automaker has not only lost that crown to Volkswagen, but is now seeing its sales fall off the cliff as Chinese giant BYD gains traction and European rivals roll out their own affordable and competitive EVs.

EV adoption across the European Union continued to accelerate in the first seven months of this year. Between January and July, battery-electric cars made up 15.6% of the EU market, up from 12.4% a year earlier, according to data released Thursday by the European Automobile Manufacturers Association (ACEA).

Over the same period, the combined share of petrol and diesel cars dropped sharply, from 47.9% to 37.7%. Europeans bought more than a million new EVs in the first seven months of 2025, but far fewer were Teslas. The company’s registrations fell 43.5% year-over-year, from 137,071 units to just 77,446 units. 

July brought another steep decline. Tesla’s sales sank 42.4%, from 11,465 cars during the same period last year to just 6,600 this year.

There are multiple aspects haunting the brand currently, and most of them stem from self-inflicted wounds. The refreshed Model Y—which we really like as an EV—has failed to spark a turnaround. Analysts have pointed to Tesla’s aging lineup, lack of new models and intensifying competition from European and Chinese brands.

But CEO Elon Musk’s politics may also be weighing heavily on the brand. Musk’s embrace of far-right figures in Europe, including his endorsement of Germany’s AfD party, has alienated buyers. In the U.S., his very public online feud with President Trump in June wiped $150 billion off Tesla’s market value in June.

Meanwhile, BYD is surging. The Chinese automaker, already the world’s largest EV manufacturer, saw registrations in Europe soar 251% in the January to July period, jumping from 16,633 units last year to 58,434 this year. About 9,700 of those came in July alone.

Tesla is now pivoting away from its core passenger vehicle business as it bets big on AI and robotics. But it could be years before those plans truly materialize. The Robotaxi pilot program in Austin, Texas and the San Francisco Bay Area still requires human drivers or supervisors, whereas rival Waymo is now operating truly driverless Robotaxis in multiple U.S. cities.

Globally, Tesla’s second-quarter revenue fell 12% while deliveries slid 13%. And Tesla may not even have encountered the worst yet. The Trump administration’s One Big Beautiful Bill axed the regulatory credit system, which was a key source of revenue for pureplay EV brands such as Tesla and Rivian.

Now with the federal EV tax credit expiring in the U.S. on Sept. 30, Musk and Tesla might have an even tougher road ahead.

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