Tesla’s sales have taken a significant hit in Europe, particularly in Germany and the UK, where they’ve been outpaced by the budget-friendly Chinese brand BYD.
Last month, Tesla recorded merely 1,110 new vehicle registrations in Germany, marking a sharp 55% decline compared to the same month last year, as revealed by recent data.
In the UK, despite being Tesla’s second-largest European market, the company saw a nearly 60% drop year-on-year in sales, with 987 new registrations reported for July by the UK Association of Auto Manufacturers and Traders.
These disappointing sales figures come just a day after shareholders approved a hefty new compensation package for Elon Musk, valued at nearly $30 billion. It seems this financial incentive might be an effort to keep Musk focused on the company amidst a backdrop of slowing sales as he dabbles more in political engagements.
In Europe, he has notably aligned himself with far-right parties and figures, which could be affecting public perception of the brand. He had been a significant donor to Donald Trump’s campaign in the United States and had a controversial time in the White House managing government efficiency initiatives.
Tesla’s position has become wobbly; its market share in Germany has decreased from 8.3% to 3.6%, placing it from third to eighth in the electric vehicle rankings during the first half of 2025. Meanwhile, EV sales overall in Germany surged by 58%, and sales in the UK rose by almost 40% over the past seven months.
BYD, with backing from Warren Buffett’s Berkshire Hathaway, has made significant strides in this landscape, selling vehicles that are around a third pricier than Tesla’s most affordable model. In the UK, BYD quadrupled its registrations in July and counted 2,498 vehicles registered in June alone. Germany saw a similar rise, with BYD’s registrations jumping to 4,544 units in the first half of the year, a dramatic increase from about 900 during the same timeframe last year.
To illustrate the shift: BYD sold over 1.1 million plug-in cars in the second quarter of 2025, which includes both battery-electric and plug-in hybrid vehicles, while Tesla managed around 384,000 purely electric vehicles. Remarkably, BYD’s battery-only EV sales have now outpaced Tesla.
Despite its struggles in Europe, Tesla remains the most favored EV manufacturer in the U.S., holding a significant 46% market share in the second quarter of 2025, even though it experienced a 15% sales drop in the first quarter. That said, competition stateside is intensifying, with traditional automakers like General Motors, Honda, Nissan, and Porsche reporting substantial gains as they pivot towards electric vehicles.
Overall, EVs represented 7.4% of all new vehicle sales in the U.S. in the second quarter of 2025.
