TLDR
- Tesla sales in Europe fell 40% year-over-year in July to 8,837 units.
- BYD registrations surged 225% to 13,503, overtaking Tesla in market share.
- Tesla faces its seventh straight month of European sales declines.
- Lack of new vehicle refreshes and reputational issues weigh on performance.
- Shares closed at $345.98, down 1.04%, with pre-market trading modestly higher.
Tesla Inc. (TSLA) closed at $345.98 on August 28, 2025, down 1.04%, before edging up 0.12% in pre-market trading to $346.40.
The decline came as new data revealed a steep 40% drop in European car sales for July, extending Tesla’s losing streak in the region to seven consecutive months. Rival Chinese automaker BYD posted explosive growth, recording more than triple the number of new car registrations compared to a year earlier.
Sales Performance in Europe
According to the European Automobile Manufacturers Association (ACEA), Tesla registered 8,837 vehicles in Europe in July, down sharply from 14,769 in the prior year. In contrast, BYD logged 13,503 registrations, up from 4,151 last year, marking a 225% increase. BYD now holds 1.2% of the European market, surpassing Tesla’s stagnant 0.8% share.
The decline comes despite overall European electric vehicle sales continuing to rise, suggesting Tesla’s struggles are company-specific. Analysts pointed to weak product momentum and slow refresh cycles as key factors behind the drop.
Competitive and Strategic Challenges
Tesla’s European slump underscores mounting challenges for Elon Musk’s automaker. Chinese brands, led by BYD, are pushing aggressively into Europe with affordable models, expanding showrooms, and competitive pricing. While Tesla has emphasized its broader ambitions in artificial intelligence, robotics, and autonomy, critics argue its core car lineup is aging.
The highly anticipated Cybertruck has not met initial expectations, while the Model Y and Model 3 face stiffer competition from newer Chinese and European EV models. Tesla has promised a more affordable electric vehicle slated for mass production in late 2025, which investors hope will help restore momentum.
Market and Policy Landscape
Tesla’s reputational headwinds in Europe have been compounded by controversies surrounding Musk’s public remarks and political associations. At the same time, governments such as the UK are introducing new EV subsidies, with grants of up to £3,750 for vehicles priced under £37,000. Tesla currently lacks qualifying models under this scheme, while competitors like Ford have secured eligibility.
Chinese automakers are benefiting from both competitive pricing and policy support, with BYD leading the charge. The rise of Chinese brands is reshaping the European EV market, now accounting for a record market share above 5% in the first half of the year.
Performance Overview: TSLA vs. S&P 500
As of August 28, 2025, Tesla’s stock is down 14.33% year-to-date, compared to a 10.55% gain in the S&P 500. Over the past year, however, Tesla shares surged 68.16%, far outpacing the index’s 16.27% gain. Over three years, Tesla’s return of 20.09% trails the benchmark’s 60.24%, but its five-year return of 134.47% continues to outperform the S&P 500’s 85.34%.
Outlook
While Tesla remains a dominant name in EVs, its European slump signals intensifying competition and the risks of a stale product lineup. With BYD gaining momentum and new subsidies reshaping the market, Tesla’s ability to deliver its promised affordable EV in 2025 may prove critical to regaining lost ground.
