Tesla’s EU sales are in freefall as VW races ahead, but the Model Y could change all that
- New data suggests Tesla’s sales in Europe have almost halved in 2025
- BYD, Xpeng and Leapmotor have all seen an increase in sales
- The overall European EV market is up 25% with VW at the top
Tesla’s current sales woes show no sign of slowing, as new data from Jato Dynamics suggests the company’s sales in Europe fell by 45% last month, resulting in its lowest market share in five years.
The issue can be partly attributed to Tesla’s aging model line-up, as customers sit tight for the more accomplished updated Model Y to appear. But many analysts have also cited a more general cooling of demand thanks to Elon Musk’s divisive foray into politics.
Earlier this year, the Financial Times reported on the Volkswagen Group’s slashing of EV production at some of its biggest manufacturing plants, owing to slow uptake of its battery electric vehicles, many early examples of which received middling reviews from the press.
However, the German marque’s BEV sales were up 180% to under 20,000 cars in February, according to Reuters, while the BMW brand and BMW-owned Mini sold almost 19,000 BEVs in February.
Comparatively, Tesla managed to sell fewer than 16,000 cars in key European markets, including the UK, Norway and Switzerland during the same period, despite overall battery electric vehicle registrations being up by 25% in February compared to the previous month.
Although still much smaller in number, BYD also recorded an 94% rise in sales in February, with over 4,000 electric vehicles sold. Similarly, Polestar also celebrated an 84% increase and newcomers, such as Xpeng and Leapmotor, have also started registering sales.
“Brands like Tesla, which have a relatively limited model lineup, are particularly vulnerable to registration declines when undertaking a model changeover,” Felipe Munoz, Global Analyst at JATO Dynamics, explained.
But many other industry experts also point to the fact that the Tesla CEO’s recent behavior has triggered a backlash from buyers, due to his affiliation with a number of right-wing political parties – particularly those in Germany.
Ahmad Assiri, research strategist at the brokerage Pepperstone, told Sky News that Musk’s political endeavors were “negatively impacting Tesla’s reputation among substantial segments of consumers and investors,” adding that BYD’s continued rapid growth was “increasingly attractive to consumers and investors alike”.
Analysis: Everything rides on new Model Y
As I have repeatedly stated, Tesla’s latest crop of vehicles is by far its finest yet, with the updated Model 3 and Model Y easily among the best electric vehicles money can buy for most people right now.
During back-to-back testing of the previous generation Model Y and the latest Model 3, the gulf in build quality, refinement, comfort and interior quality is tangible, while gains in efficiency and an increased amount of standard technology is will be welcomed by buyers.
However, the Launch Edition version of the long-awaited Tesla Model Y update is now comparatively expensive, costing a whopping £60,990 in the UK and $52,490 in the US, with many customers likely not only holding for the updated car, but also more affordable variants, which aren’t due to arrive until the summer.
This will naturally skew sales figures, while Tesla has a reputation for cyclical peaks and troughs in its quarterly sales results due to the variations in its pricing and discounting strategy.
The true test of the ‘Elon effect’ will be later this year, when customers will be presented with a full Model Y line-up. If sales remain slow at that point, perhaps it’ll then be time for Tesla to start panicking.
