Tesla’s new vehicle sales in Europe continued their downward trend in May, marking the fifth consecutive monthly decline, according to new data from the European Automobile Manufacturers Association (ACEA), CNBC reports.
The US-based electric vehicle manufacturer recorded a 27.9% drop in year-over-year sales, with 13,863 units sold across the European Union, the UK, and the European Free Trade Association.
Tesla’s market share in the region also fell to 1.2%, down from 1.8% in May 2024. The ongoing slump comes as Chinese electric vehicle makers and other global automakers gain ground in Europe’s increasingly competitive EV market.
Shares of Tesla dropped nearly 5% on Wednesday, adding to a year-to-date decline of more than 18%.
Tesla’s performance in Europe has been impacted by a variety of factors, including reputational concerns linked to CEO Elon Musk. The company’s brand image has faced scrutiny amid Musk’s public political involvement, including his financial backing of US President Donald Trump’s reelection campaign and subsequent efforts to overhaul federal agencies. Protests have reportedly taken place at Tesla dealerships across several European cities.
Although Musk has since distanced himself from the administration, public perception and consumer confidence in the brand appear to have been affected.
In contrast, Chinese automakers have continued to expand their presence in Europe despite new EU tariffs on electric vehicles from China. According to JATO Dynamics, Chinese carmakers sold 65,808 units in May, with their market share more than doubling to 5.9% year-over-year.
Felipe Munoz, global analyst at JATO Dynamics, noted that Chinese brands have been gaining traction by diversifying their offerings, including plug-in hybrids and full hybrids, to meet local market demands.
Tesla had hoped that its updated Model Y compact SUV would help reverse its European sales trend. While the vehicle has seen some success, particularly in Norway, it has not yet made a significant impact on Tesla’s broader regional performance.
At the same time, Tesla is contending with increasing pressure from both traditional automotive manufacturers and fast-growing Chinese brands like BYD, which nearly matched Tesla’s European sales in May after surpassing them in April.
