Tesla faces sales pressure in all three of the world’s biggest car markets simultaneously, with European registrations plunging 48.5% in October while industry-wide EV sales jumped 26%.

The collapse comes as CEO Elon Musk has spent much of 2025 focused on robotics pursuits and winning shareholder approval for his freshly minted $1 trillion pay package. The outlook for Tesla’s main business is darkening fast.

European Sales Crater While Competitors Surge

The European Automobile Manufacturers’ Association released devastating October data on Tuesday. Tesla registered just 6,964 vehicles across Europe, down from 13,519 a year earlier.

For 2025 overall, Tesla’s European sales have fallen approximately 30%. That decline happened while the broader EV market grew 26%.

The contrast with competitors is stark. China’s BYD sold 17,470 cars in Europe during October, more than double Tesla’s volume and representing a 206.8% year-over-year surge. Germany’s Volkswagen posted EV sales growth of 78.2% through September, reaching 522,600 units and tripling Tesla’s regional performance.

Tesla’s troubles are most acute in Europe, where more than a dozen electric models now sell for under $30,000. A wave of Chinese brands is entering the market with fresh designs and broader choice spanning EVs, hybrids, and traditional petrol cars.

China Hits Three-Year Low as Xiaomi Emerges

Tesla’s China deliveries fell to a three-year low in October, dropping 35.8%. For the year through October, sales in the world’s largest EV market are down 8.4%.

The company faces a slew of rejuvenated Chinese brands. Chery has emerged as a formidable competitor, while smartphone giant Xiaomi launched its YU7 SUV in June as a direct Model Y rival. The YU7 secured over 200,000 orders within its first three minutes of availability.

Ferdinand Dudenhoeffer, head of the CAR think tank at the University of Duisburg-Essen, summarized the competitive reality bluntly.

“The problem for Elon Musk is not just his own cars and the Chinese carmakers. The problem for Elon Musk is also that the Europeans have caught up.”

U.S. Tax Credit Expiration Triggers October Collapse

In the United States, Tesla sales surged 18% in September as car shoppers raced to beat the September 30 expiration of the $7,500 federal EV tax credit. That trend reversed sharply in October, with EV sales industry-wide dropping 24%.

Auto executives expect the EV market to remain cold. Tesla’s global vehicle deliveries are projected to decline 7% this year, according to Visible Alpha, following a 1% drop in 2024.

The record third-quarter deliveries that Tesla celebrated were artificially inflated by the tax credit deadline rush. October’s reality check suggests those buyers were pulled forward rather than representing genuine demand growth.

Stale Lineup Meets Fresh Competition

As recently as 2023, Tesla’s Model Y was the world’s top-selling car. But the company has slid down the sales charts as rivals introduced a broad array of improved EVs at competitive prices.

Tesla’s narrow lineup of just two mass-market models has grown stale, analysts say. The Model 3 sedan and Model Y SUV haven’t seen meaningful innovation since 2020.

In the United Kingdom, more than 150 electric models are now available from various brands. At least 50 new electric models will launch next year. Ginny Buckley, CEO of EV-buying advice site Electrifying.com, delivered a pointed observation.

“Out of those 50, none are Teslas.”

Tesla recently introduced a stripped-down, lower-priced version of the Model Y to boost European sales, but analysts interviewed by Reuters do not see a quick fix.

Musk’s Broken Promises and Shifting Priorities

Late last year, Musk told shareholders he expected vehicle sales to grow 20-30% in 2025. In January, the company said it expected a return to growth without offering a specific estimate, before pulling that guidance entirely the following quarter.

In October, Tesla said any growth would depend on macroeconomic factors and how quickly it could add autonomy to its cars and ramp up factory production.

The weak European results suggest there will be no quick rebound from the sales turmoil that began late last year, after Musk publicly praised far-right figures, setting off protests across the region. Musk has gone relatively quiet on politics in recent months, but Tesla’s European business has not recovered.

Tesla did not respond to requests for comment from Reuters.

EVXL’s Take

This Reuters report validates everything EVXL has been documenting throughout 2025. We’re not witnessing a temporary slump. We’re watching a structural market realignment that Tesla seems unable or unwilling to address.

When we covered Tesla’s October European sales collapse three weeks ago, the country-by-country data told a devastating story: Sweden down 89%, Denmark down 86%, Germany down 54%. Only France showed modest growth, thanks to a new EV subsidy program. Today’s ACEA data confirms those early signals weren’t outliers.

The China situation is equally dire. As we reported when Tesla hit its three-year October low, the company isn’t just losing to BYD anymore. Xiaomi’s YU7 launch in June created an entirely new competitive threat, and the smartphone maker is maintaining momentum despite fatal crashes and massive recalls affecting its SU7 sedan.

Meanwhile, the post-tax credit collapse in America that we predicted back in June has arrived exactly on schedule. The 24% October drop triggered GM to lay off 3,300 EV workers and idle billion-dollar battery plants. Ford halted F-150 Lightning production indefinitely.

What makes Tesla’s predicament unique is that it’s suffering in all three major markets simultaneously while Musk remains distracted. The Yale study we covered in October quantified the damage: Musk’s partisan political activities cost Tesla between 1 million and 1.26 million U.S. sales from October 2022 through April 2025.

The competitive dynamic has fundamentally shifted. When BYD first surpassed Tesla in European sales back in April, we noted the Chinese automaker’s aggressive pricing and rapid product rollouts were reshaping the market. Seven months later, BYD has overtaken Tesla in the UK and is executing a 2,000-dealer expansion across Europe.

Tesla’s response has been reactive rather than strategic. The company caved on CarPlay after years of Musk insisting the feature was unnecessary. It slashed lease down payments and eliminated deposits on Model Y leases. These are desperation moves, not market leadership.

The next six months will be brutal. Without federal subsidies, without fresh products, and without a CEO focused on the automotive business, Tesla is fighting a multi-front war with increasingly limited ammunition. The company that once defined the EV market is now scrambling to remain relevant in it.

What do you think about Tesla’s global sales challenges? Share your thoughts in the comments below.