Tesla's European Sales Plunge 40% as New Model Y Rollout Begins

BigGo Editorial Team
Tesla's European Sales Plunge 40% as New Model Y Rollout Begins

The European electric vehicle market is witnessing a significant shift in competitive dynamics as Tesla experiences a dramatic sales decline while competitors gain ground. Recent data reveals Tesla's market position has weakened considerably in early 2025, though industry analysts suggest the company may be poised for a potential recovery with its refreshed Model Y now entering the market.

Tesla's European Market Share Collapse

Tesla's presence in Europe has diminished dramatically, with new registration data showing a 40% drop in February compared to the same month last year. According to the European Automobile Manufacturers Association (ACEA), Tesla registered approximately 16,900 vehicles last month across Europe, down from figures seen in February 2024. This decline has caused Tesla's market share to plummet from 21.6% to just 10.3% in the European EV sector. The cumulative figures for the first two months of 2025 paint an even more concerning picture, with registrations falling 43% to 26,619 vehicles.

Tesla's European market share: 10.3% (February 2025) vs 21.6% (February 2024)

Competitors Gaining Ground

While Tesla struggles, other manufacturers are capitalizing on the opportunity. Volkswagen Group has emerged as a significant beneficiary, with its BEV sales surging 180% to nearly 20,000 units in February. BMW and its Mini brand have also performed strongly, selling almost 19,000 battery electric vehicles during the same period. Chinese automaker BYD has made impressive inroads with a 94% increase in sales, delivering over 4,000 electric vehicles to European customers. Smaller players like Polestar have also seen substantial growth, with an 84% sales increase, while newcomers such as Xpeng and Leapmotor are beginning to establish their presence in the European market.

Competitor growth: Volkswagen Group +180%, BYD +94%, Polestar +84%

Model Y Transition Impact

Industry analysts attribute part of Tesla's sales decline to the transition to the updated Model Y, which required a production shutdown at Tesla's European factory for retooling. Felipe Muñoz, an industry analyst with JATO Dynamics, noted that brands with limited model lineups like Tesla are particularly vulnerable to registration declines when undertaking a model changeover. Many potential customers likely postponed their purchases after learning about the new Model Y in January, preferring to wait for its arrival in March 2025.

Tesla sales decline: 40% drop in February 2025 compared to February 2024

The Musk Factor

Beyond product transition issues, experts suggest that CEO Elon Musk's political activities may be negatively affecting Tesla's brand perception. Musk's vocal support for right-wing political movements, particularly his intervention in German politics on behalf of the nationalist Alternative for Germany party, appears to have alienated some consumers. The impact is especially pronounced in Germany, where Tesla's sales for the first two months of 2025 plummeted by over 70% to just 2,700 vehicles—less than half of what Tesla sold in the smaller UK market during the same period.

Recovery Prospects

Despite the current downturn, there are signs that Tesla may be approaching a turning point. The company has completed its production transition, and the first refreshed Model Y units have begun shipping to customers. The newer Model Y represents a significant upgrade in build quality, refinement, and technology compared to its predecessor, potentially reigniting consumer interest. Additionally, Tesla will soon be comparing against weaker sales figures from 2024, which could make year-over-year comparisons less stark in coming months.

European EV market growth: 26% increase to nearly 165,000 cars in February

Price Positioning Challenges

The initial Launch Edition of the updated Model Y comes with a premium price tag—£60,990 in the UK and $52,490 in the US—which may be deterring some buyers. Industry observers suggest many customers are not only waiting for the updated model but also for more affordable variants expected to arrive by summer 2025. This pricing strategy could continue to affect Tesla's sales performance in the short term.

Tesla Model Y Launch Edition pricing: £60,990 (UK), $52,490 (US)

The Broader EV Market

Despite Tesla's struggles, the overall European market for fully electric vehicles expanded by 26% in February to nearly 165,000 cars. This growth indicates that while Tesla may be losing ground, the broader transition to electric mobility continues to accelerate across Europe. The coming months will be crucial in determining whether Tesla can leverage its updated Model Y to regain market share or if competitors will continue to erode its once-dominant position in the European EV landscape.