TLDR
- Tesla European Union sales plummeted 37% year-over-year in August, selling just 8,220 vehicles
- Chinese rival BYD outsold Tesla for second consecutive month with 9,130 cars, up 201%
- Tesla stock dropped 4.4% Thursday following disappointing European sales data
- Global Tesla deliveries fell 13% in first half of 2025 to 721,000 vehicles
- RBC analysts project Tesla could deliver 456,000 vehicles in Q3 despite European weakness
Tesla stock fell 4.4% Thursday after European sales data revealed the electric vehicle maker’s continued struggles in a key market. Tesla sold only 8,220 vehicles in the European Union during August, marking a sharp 37% decline from the same period last year.
The poor performance allowed Chinese competitor BYD to maintain its lead in the crucial European market. BYD sold 9,130 cars in the EU, representing a massive 201% year-over-year increase.
This marks the second straight month BYD has outsold Tesla in the European Union. The shift highlights growing competitive pressure on Tesla as new rivals gain market share.
European Market Share Battle Intensifies
When including the broader European market with the U.K. and Norway, Tesla maintained a slight edge over BYD. Tesla sold 14,831 cars compared to BYD’s 11,455 vehicles, but Tesla’s sales still declined 22% year-over-year.
Year-to-date figures show Tesla’s European challenges deepening. The company has sold 133,857 cars in the expanded European market, down 33% from 2024. Meanwhile, BYD has moved 95,940 vehicles, up an impressive 280%.
Tesla’s European struggles reflect broader global delivery challenges. The company sold 721,000 cars worldwide in the first half of 2025, down approximately 13% from the previous year.
Wall Street expects Tesla to deliver around 447,000 vehicles in the third quarter. That would represent a 3% decline from the 463,000 vehicles delivered in Q3 2024.
Political Controversies Impact Brand Appeal
Tesla faces multiple headwinds affecting sales performance. CEO Elon Musk’s political activism has alienated some traditional Tesla buyers, particularly environmentally conscious consumers.
Earlier this year, Musk endorsed Germany’s far-right AfD party. He also appeared via video at an anti-immigrant rally in the U.K. that turned violent, drawing criticism from British Prime Minister Keir Starmer.
The company also struggles with an aging product lineup and increased competition from established automakers and Chinese EV manufacturers. Tesla’s core models haven’t received major updates in recent years.
Despite these challenges, some analysts remain cautiously optimistic. RBC projects Tesla could deliver 456,000 vehicles in Q3, beating consensus estimates of 448,000 deliveries.
The analysts expect a potential boost from U.S. consumers rushing to purchase EVs before a $7,500 federal tax credit expires at the end of September. This could provide temporary support for Tesla’s delivery numbers.
Tesla stock has recovered from earlier 2025 weakness, now trading up 5% for the year after plunging 36% in the first quarter. The stock remains up about 74% over the past 12 months.
The broader European EV market showed strength in August, with electric vehicles comprising nearly 16% of new car sales. Total EV registrations rose 26% compared to August 2024, highlighting Tesla’s underperformance relative to market growth.
