Tesla’s new car sales in Europe have declined for the fifth consecutive month, dropping 27.9% year-on-year in May, according to data from the European Automobile Manufacturers Association (ACEA). The U.S. electric vehicle manufacturer’s sales in the European Union, Britain, and the European Free Trade Association fell to 13,863 units last month, down from the previous year. Tesla’s European market share also decreased to 1.2% from 1.8% in May 2024.
The decline in Tesla’s sales is attributed to increased competition from Chinese electric vehicle manufacturers, who maintained their strong presence in Europe’s new car market despite the European Union’s imposition of tariffs on Chinese EVs. Chinese automakers sold 65,808 units in May, more than doubling their market share in the region to 5.9%, according to JATO Dynamics.
Tesla’s struggles in Europe are further complicated by brand and reputational damage, partly due to CEO Elon Musk’s controversial statements and political involvement. Musk’s support for former U.S. President Donald Trump’s re-election bid and subsequent leadership of an initiative to slash federal agencies sparked protests at Tesla dealerships across Europe.
The competition for Tesla is coming from both traditional automakers and Chinese manufacturers. BYD, a Chinese auto giant, nearly matched Tesla’s sales in May after outselling the company for the first time in April. While Tesla’s revamped Model Y compact SUV helped boost sales in Norway, it hasn’t been enough to stem the overall decline in Europe.
“Despite the EU’s imposition of tariffs on Chinese electric vehicles, its car brands continue to post strong growth across Europe,” said Felipe Munoz, global analyst at JATO Dynamics. “Their momentum is partly due to their decision to push alternative powertrains, such as plug-in hybrids and full hybrids, to the region.”
Tesla’s stock price has been affected, falling nearly 5% on the day the sales data was released and is down more than 18% year-to-date.
