Tesla continues to falter in much of Europe despite increased EV demand
Europe has been a weak point for Tesla’s sales this year, so why is the automaker playing catch-up when the continent’s new car demand increased by 1.9% in May, with electric vehicles (EVs) and hybrids leading the way? One of the most significant factors at play is European drivers’ heightened interest in competing Chinese EVs. For example, Chinese state-owned SAIC Motor, which owns brands including but not limited to EV-only IM (Intelligence in Motion) Motors and MG, experienced 22.5% more European registrations during May, with new energy vehicle (NEV) sales growing 51% year-over-year.
In the U.K., Chinese-owned BYD outsold Tesla for the second month in a row, selling 3,025 units compared to Tesla’s 2,016, according to EVXL. Europe’s total demand for battery electric vehicles (BEVs) rose 26.1% in May, with Chinese automakers selling 65,808 units and doubling their total market share to 5.9%. This same month, Tesla’s European sales declined for the fifth consecutive month, down 40.5% to 8,800 units from the 14,682 units sold in May 2024. Felipe Munoz, global analyst at JATO Dynamics, said: “Despite the EU’s imposition of tariffs on Chinese electric vehicles, its car brands continue to post strong growth across Europe, NBC reports.” Munoz added: “Their momentum is partly due to their decision to push alternative powertrains, such as plug-in hybrids and full hybrids, to the region.”
What Chinese EV makers are doing right in Europe
One of SAIC Motor’s most significant strengths in Europe is its ability to offer a more diverse range of EVs than Tesla, meeting varying needs like affordability and efficiency without compromising advanced technology. Additionally, SAIC Motor has implemented European sales strategies and local partnerships, solidifying its competitiveness. More specifically, SAIC Motor has established a comprehensive value chain in Europe, comprising research and development centers, manufacturing bases, marketing and supply centers, and additional facilities. While Tesla has a factory in Grünheide, Germany, lower prices and a newer lineup allow SAIC Motor to gain a competitive advantage over Tesla’s aging models. BYD’s hugely popular Dolphin Surf city car, starting at about $25,000, became available in Europe last month. In Norway, BYD’s Seal sedan targets Tesla’s core demographic with all-wheel drive (AWD) and an impressive maximum braked towing capacity of 1,500 kg (3,307 lbs).
Tesla receives some positive European sales news for June
Tesla may be regaining some momentum in Europe, with notable sales increases in the U.K., Spain, and the Netherlands compared to May. The U.K. led this growth with sales rising 224% month-over-month, while registrations in Spain more than tripled, according to Teslarati. In the Netherlands, Tesla was June’s best-selling brand across all segments, but Teslarati’s report specified that market figures were still being finalized. Other European countries, such as Sweden, displayed mixed Tesla performance for June, with year-over-year registrations declining 70% despite a month-over-month increase from May.
Final thoughts
While Tesla experienced a European sales rebound in June, its success appears to be localized vs broad. Tesla’s continued struggles in Europe are especially concerning given that EV demand in the EU is increasing. SAIC Motor and BYD are gaining traction in this market with affordable and efficient EVs offering fresh designs, so Tesla risks falling further behind in Europe the longer it delays less expensive models.
