Tesla’s European Decline Deepens
Tesla’s troubles in Europe worsened in August as sales fell 22.5% year over year, according to data from the European Automobile Manufacturers’ Association (ACEA). The company registered just 14,831 vehicles across the region, even as total EV sales rose nearly 27% and overall auto sales climbed 4.7%.
It marks Tesla’s eighth straight month of sales declines in Europe. While August’s drop was less severe than July’s 40% plunge, the trend highlights growing headwinds for Elon Musk’s EV giant. Shares of TSLA slipped over 3% in midday trade on the news.
Regional Pain Points
The data showed steep losses in several key markets:
- France: Sales down 47.2% year over year.
- Sweden: Down 84%.
- Denmark: Down 42%.
- Norway: A rare bright spot, up 22%.
Results from Germany and the UK — Tesla’s largest European markets — are due later this month.
Year-to-Date Picture
Through the first eight months of 2025, Tesla’s European sales have dropped 32.6% to 133,857 units. That slump pushed Tesla’s market share down to 1.5%, compared with 2.3% a year ago.
Factors Behind the Decline
Analysts point to several headwinds dragging Tesla’s performance:
- Delayed rollout of cheaper EVs until U.S. tax credits expire.
- Rising hybrid popularity among European buyers.
- Elon Musk’s political ties creating reputational risk.
- Surging competition, especially from Chinese automakers like BYD (BYDDY), which are gaining share in both EVs and plug-in hybrids.
Research firm Escalent found that 47% of European buyers would consider a Chinese EV, up from 31% last year, while interest in U.S. EVs dropped from 51% to 44%.
Investor Outlook
Musk has already cautioned investors about a “few rough quarters,” but the scale of Tesla’s European decline is raising fresh concerns about the company’s global positioning. With demand shifting and rivals surging, Tesla faces the dual challenge of defending share abroad while preparing cheaper models at home.
Investors will get more clarity when Tesla reports its Q3 results next week.
WSA Take
Tesla’s European collapse is a reminder that the EV transition is no longer Tesla’s race alone. As Chinese automakers flood the market with cheaper models — and as hybrids gain renewed traction — Tesla’s first-mover advantage is being tested.
For shareholders, the pressure is twofold: Tesla must deliver on lower-cost EVs while managing Musk’s political baggage, all while fending off competition that’s both cheaper and increasingly popular.
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