Tesla’s October 2025 sales collapsed across Europe, with registrations plummeting by double-digit margins in nearly every major market—just as shareholders vote today on CEO Elon Musk’s nearly $1 trillion compensation package. The timing couldn’t be worse for the embattled EV maker, as the catastrophic sales figures underscore growing questions about whether Musk deserves the largest executive pay package in corporate history while Tesla’s core business crumbles in key markets.

According to data compiled by Ars Technica, Tesla’s European registrations fell by staggering margins across the continent in October 2025 compared to the same month last year. The declines paint a picture of a company in crisis:

Sweden saw an 89% drop,
Denmark plunged 86%,
Belgium fell 69%,
Finland dropped 68%,
Austria declined 65%,
Switzerland tumbled 60%,
Portugal sank 59%,
Germany slipped 54%,
Norway fell 50%,
the Netherlands dropped 48%,
the UK declined 47%,
Italy fell 47%, and
Spain dropped 31%.

Only France bucked the trend with a modest 2% year-over-year increase, thanks to a new EV subsidy program aimed at low- and middle-income buyers.

China Sales Add to Tesla’s October Woes

The bad news extends beyond Europe. Tesla’s China-made vehicle sales dropped 9.9% year-over-year in October to 61,497 units, according to the China Passenger Car Association. The decline reverses a brief September uptick and signals renewed struggles in the world’s largest EV market, where Tesla faces brutal competition from domestic manufacturers like BYD, which has been consistently outselling Tesla in recent months.

The October China figure marks a continuation of Tesla’s challenges in the critical market, where aggressive pricing from local competitors and an aging product lineup have eroded the company’s once-dominant position.

Record Q3 Masks Deeper Profitability Problems

The October sales disaster follows what Tesla characterized as “record” third-quarter deliveries of 462,897 vehicles. But as EVXL reported in our Q3 earnings analysis, those impressive delivery numbers masked serious underlying problems: margins shrank, costs climbed, and profits began evaporating despite the higher sales volume.

The Q3 delivery surge was largely driven by customers rushing to purchase vehicles before the federal $7,500 EV tax credit expired on September 30, 2025. Musk himself warned in July of “rough quarters” ahead as the company entered its first full period without the critical incentive. October’s European and Chinese sales figures suggest those rough quarters have arrived right on schedule.

Tesla’s Q3 automotive sales reached just $20.6 billion—only $600 million higher than Q3 2024 despite delivering 34,000 more vehicles. The stark reality: Tesla is selling more cars but making significantly less money per unit, a profitability squeeze that raises fundamental questions about the company’s pricing strategy and competitive position.

Shareholder Vote Arrives at Worst Possible Moment

Today’s shareholder vote on Musk’s compensation package takes place against this backdrop of collapsing sales and margin compression. The board is asking shareholders to approve a pay package valued at up to $878 billion over the next decade, warning that rejecting it could trigger Musk’s departure and “significant value” destruction for the company.

Tesla Board Chair Robyn Denholm’s letter to shareholders framed the choice starkly: approve the package or risk losing Musk as CEO.

“Without Elon, Tesla could lose significant value, as our company may no longer be valued for what we aim to become,” Denholm wrote.

The compensation package would grant Musk up to 12% additional Tesla stock if he achieves extraordinarily ambitious targets: growing the company’s market capitalization from approximately $1.1 trillion to $8.5 trillion, expanding annual operating profit from $17 billion to $400 billion, and delivering 20 million vehicles cumulatively. The package also requires producing 1 million operating robotaxis, manufacturing 1 million Optimus humanoid robots, and securing 10 million Full Self-Driving subscriptions.

Major institutional investors have voted against the proposal. Norway’s sovereign wealth fund, which holds a 1.16% stake worth approximately $11.6 billion, announced opposition, citing concerns about “the total size of the award, dilution and lack of mitigation of key person risk.” California’s CalPERS and New York State Comptroller Thomas DiNapoli also voted no, with DiNapoli calling the proposal “indefensible in both scale and design.”

Both major proxy advisory firms—Institutional Shareholder Services and Glass Lewis—recommended shareholders vote against the package, calling it excessive and warning it would dilute shareholder value.

Aging Product Lineup and Intensifying Competition

The October sales collapse reflects deeper strategic problems that a compensation package won’t solve. Tesla has failed to meaningfully refresh its core Model 3 and Model Y lineup since 2020, while competitors—particularly Chinese manufacturers—have rapidly expanded their offerings with fresher designs and more competitive pricing.

BYD, China’s EV giant, has been particularly aggressive in Europe. The company’s sales surged threefold in the first eight months of 2025, and BYD has now outsold Tesla in Europe for multiple consecutive months. In Germany, BYD set a new monthly sales record in October with 3,353 vehicles—more than quadruple Tesla’s dismal 750 units in Europe’s largest automotive market.

BYD’s Seal U compact SUV exemplifies the competitive threat: it offers comparable features to Tesla’s Model Y at a significantly lower price point, while providing the updated design and technology features that Tesla’s aging lineup lacks.

Product Pipeline Raises More Questions Than Answers

Tesla’s near-term product pipeline offers little relief. The company’s promised affordable model—crucial for expanding its addressable market—has been repeatedly delayed and still lacks concrete details or a production timeline. The Cybertruck, which was supposed to be a volume product, has seen demand collapse with discounts reaching $8,500 from its $70,000 base price.

Meanwhile, Musk’s focus has shifted increasingly toward robotaxis and AI. Tesla chairperson Robin Denholm conceded in recent comments that a steering wheel “would probably be necessary” to sell the Cybercab to the public, undermining the autonomous vehicle’s core premise. The second-generation Roadster remains nothing more than artist renderings nearly a decade after its supposed reveal.

EVXL’s Take

EVXL has been documenting Tesla’s European sales collapse for months, and October’s catastrophic figures represent the culmination of trends we’ve been tracking since April’s 53% European sales drop. We covered the 81% Sweden crash, the 60% Germany plunge in June, and the 55% July collapse. This isn’t a sudden crisis—it’s a predictable outcome of strategic failures and self-inflicted wounds.

The timing of today’s shareholder vote is almost poetically ironic. Tesla’s board wants shareholders to approve an $878 billion compensation package for Musk based on achieving targets that include growing market cap to $8.5 trillion and delivering 20 million vehicles cumulatively. Yet the actual business reality shows sales imploding across Europe (down 30%+ year-to-date), China struggling with nearly 10% October decline, and profitability eroding despite “record” deliveries artificially inflated by the tax credit expiration rush.

The compensation vote essentially asks: should we reward spectacular failure with nearly a trillion dollars? Tesla’s October European sales—with Sweden down 89%, Denmark down 86%, Germany down 54%—arrived the day shareholders must decide. It’s hard to imagine worse optics.

Three core problems are destroying Tesla’s European business, and none of them are solved by paying Musk more:

First, the product lineup is stale. The Model 3 and Model Y haven’t seen meaningful innovation since 2020. A brief September uptick when Model Y reclaimed Europe’s top sales spot was still down 8.6% year-over-year and represented “managed decline,” not genuine recovery. European buyers want fresh designs and updated technology—exactly what competitors like BYD, Volkswagen, and even legacy manufacturers are delivering.

Second, Musk’s political controversies have become a business liability in Europe. His support for far-right parties, controversial statements about European politics, and increasing association with divisive American political movements have alienated the progressive, environmentally conscious European buyers who were Tesla’s natural base. Protests have targeted Tesla showrooms and charging stations across the continent. You can’t insult your customers and expect them to keep buying your products.

Third, Chinese competition has fundamentally altered the European EV landscape. BYD, SAIC (MG), Omoda, and other Chinese manufacturers aren’t just undercutting Tesla on price—they’re offering competitive or superior technology at lower price points while refreshing their lineups far more rapidly. BYD’s September European sales surged 272% year-over-year while Tesla’s fell 10.5%. That’s not a temporary blip—it’s a structural shift in competitive dynamics.

The board’s framing of the compensation vote as “keep Musk or lose everything” rings hollow when sales are collapsing on Musk’s watch. If only Musk can save Tesla, why is Tesla dying under his leadership? If his focus on robotaxis and AI is the path forward, why are those initiatives still running with safety drivers years behind schedule while the core automotive business hemorrhages customers?

EVXL previously documented how Musk built Tesla on billions in government subsidies and tax credits, then worked to dismantle those same programs for competitors through his role in the Department of Government Efficiency. That hypocrisy hasn’t escaped European notice, where Tesla benefited enormously from subsidies that Musk now opposes for others.

The compensation package requires producing 1 million robotaxis and 1 million Optimus robots—targets that sound more like science fiction than achievable business milestones given current progress. Tesla’s robotaxi service launched in Austin with 10-20 vehicles and still requires safety drivers. The Optimus robot remains a concept that Musk admits has stumped engineers on basic functionality like hand dexterity. These aren’t realistic near-term business lines—they’re speculative bets that shareholders are being asked to pay for in advance with nearly a trillion dollars.

What Tesla needs isn’t a bigger carrot for Musk—it’s a fundamental strategic refocus on the automotive business that still generates virtually all its revenue. That means accelerating the affordable model launch, meaningfully refreshing the Model 3 and Model Y with competitive technology and design, pricing aggressively to compete with Chinese manufacturers, and rebuilding brand reputation in Europe through both product excellence and Musk taking a step back from controversial political activism.

Instead, shareholders are being asked to approve a compensation package that could make Musk the world’s first trillionaire while the company’s sales crater by 89% in major markets. The October European sales figures represent a verdict that’s already been delivered: customers are voting with their wallets, and they’re voting no.

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