Tesla Slumps in UK, Germany; Musk Expects EU Turnaround

Tesla is experiencing a sharp sales decline in Germany and the United Kingdom—two of its most important European markets—while Chinese rival BYD continues to grow rapidly, according to newly released government and industry data. In July, Tesla’s sales fell by 55.1% in Germany and 59.9% in the UK.

In Germany, Tesla sold 1,110 battery electric vehicles (BEVs) in July 2025, a 55.1% year-over-year decrease, according to figures from Germany’s Federal Motor Transport Authority (KBA). In contrast, BYD registered 1,126 BEV sales, marking a 389.6% increase compared to July 2024. While Tesla once sold over 60,000 vehicles annually in Germany, it may now struggle to reach 20,000 units this year.

Year-to-date figures also reflect Tesla’s downward trend in Germany. The US-based automaker has sold around 10,000 vehicles in 2025, with no detailed breakdown by model or segment provided by the KBA.

A similar pattern is emerging in the UK. According to data from the Society of Motor Manufacturers and Traders (SMMT), Tesla sold 987 vehicles in July 2025, down from 2,462 units a year earlier—a 59.9% decline. Meanwhile, BYD increased its UK sales to 3,184 units, up from 768 in July 2024—an increase of 314.6%.

Year-to-date, Tesla has delivered 23,708 vehicles in the U.K., a 6.9% decline compared to the 25,491 sold in the same period in 2024. In contrast, BYD sold 22,574 units in the U.K. through July, a growth of more than 500% from 3,672 units during the same period last year.

The performance gap extends beyond the U.K. and Germany. According to a previous report from JATO Dynamics, BYD has already overtaken Tesla in overall European EV sales. “This is a watershed moment for Europe’s car market, particularly when you consider that Tesla has led the European BEV market for years, while BYD only officially began operations beyond Norway and the Netherlands in late 2022,” said Felipe Munoz, a global analyst at the firm.

As of mid-2025, Tesla’s declining sales in Europe coincide with increased competition from Chinese EV manufacturers and a shifting regulatory and pricing environment. BYD's sales momentum indicates its growing appeal in traditionally Tesla-dominated markets, with analysts watching closely to see if the trend continues into 3Q25.

Tesla is not only facing increased competition but also reputational challenges linked to Elon Musk’s public statements and political affiliations. According to the European Automobile Manufacturers Association, Tesla’s market share in Europe declined for the sixth consecutive month in June.

While Tesla previously attributed its sales drop to supply constraints related to the Model Y changeover, the downturn has continued into the second half of 2025. Between 2023 and 2024, Tesla’s European sales fell by around 10%, or 40,000 units. As of July 2025, sales are down 34.3% year-to-date.

Musk has publicly acknowledged that Tesla may face “a few rough quarters” due to rising tariffs and the expiration of US federal EV tax credits, but insists that sales in Europe will rebound once supervised self-driving is approved.