Tesla’s new car sales in Europe plunged 27.9% in May, even as the region saw a major rise in demand for electric vehicles, data from the European Automobile Manufacturers Association (ACEA) showed.
Tesla is struggling to keep up with Europe’s electric vehicle boom. In May 2025, the U.S. carmaker saw its new car sales drop nearly 28% compared to a year earlier, even as fully-electric vehicle sales in the region jumped by 27.2%.
The decline marks Tesla’s fifth consecutive month of falling sales in Europe. Industry analysts point to increased competition from cheaper Chinese EVs and backlash over CEO Elon Musk’s public statements as reasons behind the slump.
Tesla’s market share in Europe has now shrunk to just 1.2%, down from 1.8% in May 2024. Hopes that the refreshed Model Y would boost the company’s appeal haven’t yet materialized.
Meanwhile, overall car sales in the European Union, Britain, and the European Free Trade Association rose by 1.9% in May to 1.11 million vehicles, led by strong demand for plug-in hybrids and alternative-fuel vehicles.
Battery-electric vehicle (BEV) registrations rose 26.1%, plug-in hybrids (PHEVs) by 15%, and hybrid-electric vehicles (HEVs) by 19.8%. Combined, these types of vehicles made up nearly 59% of all new car sales in the EU, a jump from just under 49% a year earlier.
Among individual automakers, China’s SAIC Motor and Germany’s BMW posted growth of 22.5% and 5.6%, respectively. Japan’s Mazda saw a steep decline of 23%.
Regionally, Spain and Germany reported increases in new car sales of 18.6% and 1.2%, while France and Italy experienced drops of 12.3% and 0.1%. The UK saw a modest gain of 1.6%.
Despite Tesla’s downturn, the shift toward electrification in Europe shows no signs of slowing.
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