Europe sees another decline in Tesla sales, marked by delayed broader release of Model Y refresh
Tesla's sales recovery in key European markets is showing signs of strengthening in mid-2025, driven primarily by the Model Y and competitive dynamics with other EV brands.
Model Y Delivery Timeline and Sales Recovery
The first half of 2025 saw a 33% year-over-year drop in European deliveries for Tesla, with about 110,000 vehicles delivered compared to 165,000 in H1 2024. This slump followed a sharp decline in Model Y registrations, with a 50% average monthly drop from January to April. However, since May 2025, Model Y registration volumes have stabilized, and its sales edged up slightly (+0.1% YoY) in June, maintaining its position as the top battery electric vehicle (BEV) model in Europe.
Strong recovery momentum was observed in markets such as the UK, where June registrations surged by 224%, and Spain, where registrations tripled compared to May. In the Netherlands, Tesla even became the best-selling car brand across all vehicle segments in June.
Competition from Other EV Brands
Tesla faces intensifying competition in Europe from both legacy European automakers and emerging Chinese EV makers, notably BYD and Volkswagen (VW). VW’s ID.4 and ID.3 models have seen strong sales, and Volkswagen’s premium ID.7 is also performing well. New entrants such as the Kia EV3, Renault 5, and Skoda Elroq have gained traction, entering the top ten best-selling EVs in Europe for H1 2025, putting additional pressure on Tesla’s market share.
As a result, Tesla’s share of the European EV market fell from 22% in 2024 to 15% in H1 2025, at a time when overall EV registrations in Europe grew by 24%.
Supporting Factors in Tesla’s Recovery
Tesla’s strategic expansion of Supercharger infrastructure in Europe helps alleviate charging availability concerns among consumers, which remain a top barrier for European EV buyers. Policy and economic factors, such as subsidy rollbacks in Germany and inflation impacts in southern Europe, have also affected Tesla’s European sales but do not fully explain Tesla’s relative market share loss compared to competitors.
In the UK, Tesla's sales decreased more than 45% year-over-year, and the spokesperson attributed the drop to limited inventory. The refreshed Model Y, expected to boost sales, is awaiting deliveries from the Berlin factory. In Germany, Tesla sold 1,210 vehicles in May, a 36% decrease from the same period last year. Chinese rival BYD saw its sales in Germany soar ninefold during the same period, reaching 1,857 units.
Despite these challenges, Tesla continues to face competition from cheaper Chinese EV brands and traditional automakers, which are increasingly investing in electric vehicles. The updated Model Y is already starting deliveries in Norway, where it is seeing an early sales bump.
In summary, Tesla’s Model Y delivery timeline is improving with stabilization and growth in late Q2 2025, driving an emerging recovery in key European markets like the UK, Spain, and the Netherlands. However, the company still faces significant competitive pressure from European and Chinese EV brands, regulatory hurdles (notably delayed FSD approval), and macroeconomic headwinds that continue to challenge overall sales growth and market share in Europe.
- Despite the intense competition from European automakers like Volkswagen and emerging Chinese EV makers such as BYD, Tesla's Model Y is maintaining its status as the top battery electric vehicle (BEV) model in Europe.
- The recovery of Tesla's sales in key European markets, particularly the UK, Spain, and the Netherlands, is being driven not only by the Model Y but also by the dynamics of competition with other electric vehicle (EV) brands.
- In the automotive industry, technology plays a crucial role, and Tesla's strategic expansion of Supercharger infrastructure in Europe is helping alleviate charging availability concerns, a significant barrier for European EV buyers.
- In the ever-evolving landscape of the transportation sector, Tesla continues to face challenges, including competition from cheaper Chinese EV brands, regulatory hurdles, and macroeconomic headwinds, particularly in the UK and Germany, where the sales of electric cars, including Tesla's Model Y, are impacted by factors like limited inventory and competing brands like BYD.
