Tesla’s sales in Europe plummeted for a fifth consecutive month in May, falling 27.9% year-on-year to just 13,863 new registrations across the European Union, the United Kingdom, and the European Free Trade Association, according to fresh data from the European Automobile Manufacturers Association (ACEA).
The drop has pushed Tesla’s market share in the region down to 1.2% from 1.8% a year ago, marking a steep decline for the U.S. electric vehicle giant that once led Europe’s EV revolution.
The figures, released Wednesday, show Tesla’s increasingly tenuous position in Europe’s evolving auto market, where Chinese automakers and traditional European brands are now surging, offering a broader array of electric and hybrid vehicles at lower prices.
Register for Tekedia Mini-MBA edition 19 (Feb 9 – May 2, 2026): big discounts for early bird.
Tekedia AI in Business Masterclass opens registrations.
Join Tekedia Capital Syndicate and co-invest in great global startups.
Register for Tekedia AI Lab: From Technical Design to Deployment (next edition begins Jan 24 2026).
Tesla’s stock responded sharply to the data, falling nearly 5% on Wednesday morning, and has now lost more than 18% of its value so far in 2025.
Musk’s Politics Cast Long Shadow Over Brand in Europe
Tesla’s continued struggles in Europe come despite CEO Elon Musk appearing to tone down his controversial political rhetoric in recent weeks. The change in approach, however, may be too little too late, as years of public alignment with the American far-right and inflammatory online behavior have already left a bitter taste across much of Europe.
Musk’s outspoken support for President Donald Trump, including reports that he donated nearly $300 million to Trump’s re-election campaign, drew widespread condemnation on the continent. Musk also became a leading voice in attacking federal U.S. agencies, publicly calling for sweeping cuts and accusing regulators of “weaponizing” their authority.
His promotion of conspiracy theories, often shared from his own platform X (formerly Twitter), and repeated attacks on mainstream media and progressive causes, further cemented his image as a polarizing figure. Musk also gained notoriety for echoing far-right narratives on immigration, attacking DEI (diversity, equity, and inclusion) efforts in tech, and sharing posts that many critics labeled as antisemitic or white nationalist in tone.
The backlash was swift in Europe, with apathy growing at Tesla dealerships in countries like Germany, France, and the Netherlands. Labor unions, which wield considerable influence in many European markets, became increasingly critical of Musk’s anti-regulatory stance and aversion to collective bargaining.
Even though Musk has distanced himself from Trump in recent weeks, publicly falling out with the president after policy disagreements, the reputational damage appears to be lasting. Analysts believe it has contributed directly to Tesla’s brand deterioration in socially progressive and environmentally conscious European markets.
Chinese Rivals Surge Despite Tariffs
While Tesla fumbles, Chinese automakers are thriving in Europe, even after Brussels imposed fresh tariffs on Chinese EVs to curb market disruption. Brands like BYD, MG Motor, and Leapmotor have made significant inroads by offering affordable electric and plug-in hybrid options tailored to price-sensitive consumers.
According to JATO Dynamics, Chinese brands sold 65,808 vehicles in May alone, increasing their market share to 5.9%, more than double from the previous year.
“Despite the EU’s imposition of tariffs on Chinese electric vehicles, its car brands continue to post strong growth across Europe,” said Felipe Munoz, global analyst at JATO. “Their momentum is partly due to their decision to push alternative powertrains, such as plug-in hybrids and full hybrids.”
Tesla, which only offers fully electric vehicles, has refused to diversify into hybrid models — a decision that now appears to be hurting the company in a market where consumers are leaning toward transitional technologies as they shift from combustion engines.
Model Y Fails to Spark Recovery
Tesla’s refreshed Model Y compact SUV, touted as a potential comeback vehicle, helped boost sales in Norway, one of its strongest European markets. However, it hasn’t been enough to reverse the broader decline across the continent.
Meanwhile, traditional automakers like Volkswagen, Renault, and BMW have stepped up their EV efforts, combining competitive pricing with strong service networks and brand familiarity — a combination that’s chipping away at Tesla’s former first-mover advantage.
The slump raises serious questions about Tesla’s strategy in Europe, a region that once accounted for a large chunk of its international growth. With the company’s market share dwindling and rivals capitalizing on affordability, flexibility, and local goodwill, analysts warn that Tesla needs more than just improved tech.
It needs a major brand reset.
If Tesla is to regain its footing, it will have to navigate not only intensifying competition but also repair a fractured public image — a task that may prove far more difficult than engineering a new battery or software update.
And in a region as politically sensitive and environmentally aware as Europe, Musk’s voice may no longer be Tesla’s best asset — it might be its biggest liability.