New Electric Vehicle Registrations in Europe Rise as Tesla Sales Plunge

Sales of new cars in Europe rose 5.9% in July 2025 as per Reuters. Data from the European Automobile Manufacturers Association (ACEA) showed that sales increase in Germany outweighed drops in France, Italy, and Britain last month.

According to CNBC, Tesla’s market share in the region shrunk for the seventh month despite the overall increase in electric car sales. The July Tesla sales plunge in Europe saw the U.S. EV maker trail Chinese competitor, BYD.

Tesla vs BYD Market Share

For the month of July, new Tesla car registrations totaled 8,837, representing a 40.2% drop Year-on-Year (YoY) according to ACEA data. BYD registered 13,503 new cars in the same month, representing a 225% annual increase. Tesla’s sales drop reduced its European market share from 1.4% a year ago to 0.8%, while BYD’s market share rose to 1.2%.

Tesla continues to encounter multiple challenges in the European market. These include damage to the Tesla brand resulting from CEO Elon Musk’s association with the U.S. President Donald Trump’s administration and intense Chinese EV competition.

Which have been aggressive in launching new models for the European market. BYD leads in this push. Over the last two years, the Chinese EV manufacturer has opened showrooms across the region and priced its cars competitively to boost BYD sales in Europe. Data from JATO Dynamics shows that Chinese EV makers controlled more than 5% of the European market in the first half of 2025.

But Tesla isn’t the only EV maker that is experiencing intense competition from Chinese EV makers in Europe. Leading car makers including Hyundai Group, Stellantis, Toyota, and Suzuki reported a drop in YoY new car registration in Europe in the month of July 2025. On the contrary, BMW, Volkswagen, and Renault Group recorded an increase in new car registrations in the region in July.

Global Sales Drop

In recent months, Tesla has struggled with dipping sales across the globe. The company’s sales revenue dropped in the second quarter of 2025 with Musk warning that it could encounter several rough quarters. The global drop in Tesla sales was partly attributed to the fact that the company has not conducted a major refresh of its electric vehicle lineup.

On August 4, 2025, Tesla’s July sales of its China-made EVs dipped by 8.4% compared to the same period last year. The company delivered 67,886 units of its China-made Model Y and Model 3 vehicles to Europe and other markets, representing a 5.2% drop from the deliveries made in June 2025. Earlier this year, Tesla said it was developing an affordable electric vehicle in a bid to boost sales. The company planned to commence mass production of the new EV in the second half of 2025.

Local Brands Lead in New Vehicle Registrations

Car sales in Britain, the European Union, and the European Free Trade Association increased to 1.09 million units in July 2025. On August 18, Tesla introduced UK lease discounts of up to 40% in a bid to move more units in the country and leverage limited storage space.

Renault and Volkswagen recorded an 8.8% and 11.6% YoY increase in new registrations during the month. Overall, EV sales in Europe rose by 7.4%, while new registrations for hybrid electric, battery electric, and plug-in hybrid vehicles increased by 56.9%, 39.1%, and 14.3% respectively.

Europe’s EV car sales rose as local manufacturers like Volkswagen continue to study new launches in a bid to stay ahead of Chinese competitors in the region’s growing electric car market. The move is also aimed at enabling European EV manufacturers to comply with laws that encourage EV adoption.