In May 2025, Tesla’s European sales plummeted for the fifth consecutive month, with only 8,729 vehicles sold across the European Union—a 40.5% decline from the 14,682 units sold in May 2024, according to data from the European Automobile Manufacturers Association. As demand for electric vehicles (EVs) grows, Tesla’s struggles highlight shifting consumer preferences toward affordable Chinese competitors and challenges tied to CEO Elon Musk’s public controversies, reports Die Zeit.

Rising Competition from Chinese Carmakers

Tesla’s EU market share has dwindled from 1.6% to 0.9%, while Chinese manufacturers like SAIC Motor and BYD are gaining traction. SAIC Motor sold 18,716 vehicles in May, up from 13,562 the previous year, boosting its market share to 2%. In the UK, BYD outsold Tesla for the second consecutive month, moving 3,025 units compared to Tesla’s 2,016, per the Society of Motor Manufacturers and Traders.

Chinese brands are capitalizing on lower price points, appealing to cost-conscious buyers. For instance, BYD’s compact models often retail for thousands less than Tesla’s updated Model Y, which starts at approximately $46,000 (€43,000) in Europe. Meanwhile, Tesla’s reliance on the refreshed Model Y to recapture market share has faltered, as consumers prioritize affordability amid economic pressures.

EV Market Growth and Regional Trends

Despite Tesla’s decline, the EU’s battery-electric vehicle (BEV) market is thriving, with registrations rising 25% year-on-year to 142,776 units. Plug-in hybrid sales also surged by 46.9% to 87,301 units. Germany led BEV adoption with 43,060 registrations, a 44.9% increase, while France saw a dip, dropping to 19,414 from 23,892. Hybrid-electric vehicles remain the EU’s top choice, capturing 35.1% of the market, compared to petrol’s 28.6%, down from 35.6% last year.

These trends underscore a robust shift toward electrification, but Tesla faces hurdles in maintaining its premium positioning. Cheaper alternatives are reshaping the competitive landscape, forcing established players to rethink pricing and production strategies.

Musk’s Influence and Tesla’s Challenges

Elon Musk’s polarizing public image continues to impact Tesla’s brand perception. The Times reports that “controversy around the political views of Elon Musk, the chief executive, continues to weigh on consumer sentiment.” As Musk balances his role at Tesla with advisory work for President Trump’s administration, the company’s European performance suggests a need for renewed focus on customer trust and market strategy.

Tesla Cybertruck Prices Plummet As New Models Hit The Market — Tesla Cybertruck Prices Plummet as New Models Hit the Market

Tesla’s production adjustments also reflect broader industry dynamics. Chinese rival BYD, which sold 4.27 million vehicles globally in 2024, has scaled back production by at least a third at some factories and canceled night shifts to manage rising inventory, according to Reuters. Tesla may need similar agility to address its European challenges.

Looking Ahead for Tesla and the EV Industry

Tesla’s European struggles highlight the intensifying competition in the EV sector. To regain momentum, the company must address pricing pressures, enhance its brand appeal, and counter the affordability of Chinese rivals. As the EU’s EV market continues to grow—projected to reach over 1.5 million BEV registrations in 2025 by current trends—Tesla’s ability to adapt will determine its future dominance. For EV enthusiasts and owners, these shifts signal a market increasingly driven by choice and value, with affordability reshaping the road ahead.