TLDR:
- Tesla’s European sales plunged 49% in April despite a 27.8% rise in overall EV sales.
- The upgraded Model Y failed to boost Tesla’s appeal amid fierce competition and political backlash.
- Tesla’s market share in Europe dropped to 0.7% from 1.3% a year ago, marking the fourth consecutive monthly decline.
- Financial woes deepen with a 20% revenue drop and 71% net income plunge in Q1 2025, fueling investor uncertainty.
Tesla is facing significant challenges in Europe as its sales dropped sharply by 49% in April compared to the previous year.
This decline comes despite the booming electric vehicle (EV) market in the region, where battery-electric car sales rose 27.8% year-on-year.
Overall car sales in Europe showed only a slight decrease of 0.3%, reflecting steady demand, but Tesla’s figures tell a very different story. The European market, which includes the EU, Britain, and the European Free Trade Association (EFTA), sold around 1.07 million vehicles in April, with EVs accounting for a growing share.
While most automakers are benefiting from Europe’s push towards cleaner transportation, Tesla’s faltering sales highlight how tough the competition has become. Chinese state-owned SAIC Motor saw a 24.5% increase in registrations, and Japan’s Mitsubishi experienced a 22.1% rise, signaling that many consumers are turning to other brands.
Model Y Upgrade Fails to Spark Consumer Interest
Tesla’s hopes of reviving sales with an upgraded Model Y have so far fallen flat. The refreshed model was expected to attract more European buyers, but the market response has been lukewarm at best. Tesla now holds only 0.7% of the European EV market, down from 1.3% a year earlier with competitors like BYD leading. This represents the fourth consecutive month of declining sales in the region.
In case you've seen the misleading headlines from Bloomberg and other large media today that BYD has overtaken Tesla in 🇪🇺 Europe in BEV sales, take a look at the chart below and ask yourself what they try to tell you.
Yes, BYD is not even in the top 8 in Europe in 2025.
In… pic.twitter.com/544q6Lg3vR
— Alex (@alex_avoigt) May 22, 2025
Several factors contribute to this poor performance. Intensified competition from European automakers and aggressive Chinese entrants has made the market increasingly crowded and price-sensitive. European consumers now have more options that combine affordability, range, and technology. Additionally, Tesla’s premium pricing and limited localized offerings have made it less competitive.
Investor Confidence in Tesla Shaken
Tesla’s operational struggles are reflected in its financial results and investor sentiment. In Q1 2025, Tesla’s automotive revenue declined 20%, and net income plunged 71%, painting a concerning picture of the company’s health. The stock price has dropped more than 10% year-to-date, underperforming major indices like the S&P 500.
Investor opinion is divided on Tesla’s future. A recent Stocktwits poll showed that 50% of retail investors remain confident in Tesla’s long-term prospects, believing Elon Musk’s leadership is key. However, 22% are actively selling shares due to worries about Musk’s unpredictable behavior and the company’s volatile fundamentals.
However, Musk has sought to calm fears by committing to remain CEO for at least five more years, but his controversial political roles and distractions have raised questions about his focus on Tesla.
Europeean Auto Industry Charges
Notably, Europe’s automotive market is undergoing a rapid transformation. Electrified vehicles — including battery-electric (BEV), plug-in hybrid (PHEV), and hybrid electric (HEV) cars — now make up nearly 60% of all passenger car registrations in April 2025, up from 47.7% the previous year. Spain and Italy have seen car sales grow by 7.1% and 2.7% respectively, although some larger markets like France and Germany experienced slight declines.
Nevertheless, European manufacturers are also grappling with rising production costs, U.S. tariffs on imports, and economic uncertainty, yet they continue to innovate and capture market share.
