Tesla Sales in Europe Plummet in July, Highlighting Struggles in Key Markets
Tesla’s sales took a significant hit in Europe in July, with a sharp decline in both Germany and the UK underscoring the increasingly serious challenges facing the electric car manufacturer in two of its major markets.
According to data released by the UK Society of Motor Manufacturers and Traders on August 5th, Tesla’s new car registrations in the UK plummeted by around 60%, with only 987 vehicles registered, far below the approximately 2462 vehicles from a year ago.
In Germany, Europe’s largest car market, data from the Federal Motor Transport Authority showed that Tesla’s sales fell by 55.1%, dropping to 1110 vehicles. In the first seven months of 2025, Tesla’s registrations in Germany had already declined by nearly 58%, totaling just 10,000 vehicles.
While Tesla’s sales tumbled, Chinese competitor BYD saw explosive growth in Europe. The Shenzhen-based carmaker saw its sales in the UK surge almost fourfold to 3184 vehicles in July, and in Germany, the numbers rose nearly fivefold to 1126 vehicles.
These figures continued Tesla’s trend of declining performance in the European market in recent months. According to the latest data from the European Automobile Manufacturers’ Association, Tesla’s market share has been decreasing for six consecutive months. Factors contributing to this decline include intense competition from Chinese brands, reduction in government subsidies, as well as external perceptions influenced by Musk’s controversial statements and his relationship with the Trump administration.
This European slump aligns with Tesla’s underperformance in the second quarter results. The company reported a 12% year-on-year decrease in quarterly revenue, down to $22.5 billion, the largest drop in a decade. Operating income also plummeted by 42% to $923 million. Global vehicle deliveries dropped by 13%, with the delivery volume of their main models, Model 3/Y, also decreasing by 12%.
During the earnings call, Musk acknowledged that Tesla may face “several challenging quarters” due to changes in US tariffs, the impending end of electric vehicle tax credits, and evolving autonomous vehicle regulatory policies.
Despite the sales downturn, Tesla is accelerating its strategic transformation, no longer solely relying on pure electric vehicle business. In June of this year, the company launched its first robotaxi service in Austin, Texas, and plans to expand to more US cities, with the aim to mass-produce the “Cybercab” specifically for this purpose by 2026. Additionally, Tesla has begun trial production of a more affordable vehicle model, similar in appearance to the Model Y, with plans for mass production by the end of this year.
Tesla’s Board of Directors recently approved a $29 billion stock incentive plan to replace the record-breaking compensation case deemed invalid by a Delaware court in 2018. The Board stated that Musk’s leadership role is indispensable as the company shifts its focus to new areas such as artificial intelligence, robotics, and energy storage.
In a letter to shareholders, the Board described Musk’s new incentive plan as the “primary reward for his outstanding contributions” and praised him for possessing a “unique vision and leadership” that has driven Tesla’s growth and created significant shareholder value.
The Board emphasized that, as the company enters a crucial transformation phase, retaining Musk is more important than ever. They further stated that to successfully transition, the company needs a leader who can combine strategic vision, adaptability, and execution capabilities to surpass competitors and inspire team potential. Musk has repeatedly demonstrated these extraordinary abilities in the past, leading the company through transformative changes since its inception and delivering remarkable shareholder returns.
As Tesla navigates through turbulent times in its European markets and evaluates its global strategy, the future trajectory of the electric car giant under Musk’s leadership remains under scrutiny.