The European automotive market witnessed a significant shift in July 2025, as Tesla experienced a sharp decline in sales, while its Chinese competitor BYD continued its strong upward momentum, according to official data released by the European Automobile Manufacturers’ Association (ACEA).

A Historic Decline for Tesla

Tesla recorded a 40% year-on-year drop in new car registrations, with only 8,837 vehicles registered in July. This marks the seventh consecutive month of declining sales for the company in Europe.

Experts attribute this downturn to several key factors, including:

• Intensifying competition from Chinese manufacturers offering more affordable electric vehicles.
• The absence of major updates in Tesla’s lineup, reducing its appeal in European markets.
• Negative impacts on the company’s reputation, fueled by ongoing controversies surrounding CEO Elon Musk and his policies.

BYD’s Strong Surge

In stark contrast, BYD achieved a dramatic sales leap, with 13,503 new registrations in Europe during July—an impressive 225% increase year-on-year.

This remarkable growth allowed BYD to overtake Tesla in market share, reaching 1.2%, compared to Tesla’s 0.8%. Analysts note that this success highlights BYD’s effective strategy of delivering high-quality electric vehicles at competitive prices, appealing to a broader range of European consumers.

Implications for the European Automotive Market

This market shift comes at a time when Europe is experiencing overall growth in the electric and hybrid vehicle sector, with governments pushing for cleaner energy adoption through subsidies and tax incentives.

However, the competition has become fiercer:

BYD continues to strengthen its foothold by expanding sales outlets and after-sales services across Europe.

Tesla now faces a serious challenge in maintaining its former dominance, forcing the company to reconsider its pricing strategies, accelerate new model launches, and improve its brand image.