Tesla Slumps in Europe as BYD Takes the Fast Lane

Tesla’s once-dominant grip on Europe’s EV market is slipping—fast. The electric carmaker’s sales crashed more than 55% in both the UK and Germany last month, while Chinese rival BYD is speeding ahead, racking up record numbers in both markets.

According to fresh data out Tuesday:

• K. Tesla sales dropped nearly 60% in July, with just 987 new cars registered, down from 2,462 a year ago.
• In Germany, Tesla fell 55% year-over-year, down to just 1,110 new cars in the same month.
• Zooming out: From January through July, Tesla sold 8% fewer vehicles in Germany compared to last year.

Ouch.

This follows a tough year for Elon Musk’s company in Europe, where it’s steadily losing market share. Tesla has now dropped to eighth place in Germany’s EV rankings for the first half of 2025, with market share shrinking from 8.3% to just 3.6%.

On the flip side, BYD—China’s EV juggernaut backed by Warren Buffett—is exploding onto the European scene.

• In the K., BYD more than quadrupled its July sales to 3,184 units.
• In Germany, sales jumped nearly 390% year-over-year.

BYD is selling sleek EVs at a fraction of Tesla’s price, and it’s working. Globally, BYD sold over 2.1 million vehicles in the first half of 2025—including plug-in hybrids—beating Tesla’s 384,000 battery-only vehicles for the quarter.

There’s no single reason, but a mix of factors is dragging Tesla down in Europe:

• Stiff competition from cheaper, newer players like BYD.
• Political blowback from Musk’s public support of far-right politicians in the UK, Germany, and France.
• Reputational damage from his time heading Trump’s Department of Government Efficiency (DOGE) before their very public split.
• Confusion around EV subsidies and shifting government policies are also making consumers hesitant.

Even the release of Tesla’s revamped Model Y SUV wasn’t enough to turn things around.

As Tesla struggles, Musk just secured a new $30 billion pay package, approved by shareholders. The goal? Keep him laser-focused on fixing Tesla’s sales slump—though some critics say it’s tone-deaf timing, given how rough things are looking abroad.

In the US, Tesla is still the EV frontrunner, holding 46% of the market in Q2. But even there, the ground is shifting.

Legacy carmakers like GM, Honda, Nissan, and Porsche are posting huge EV gains. Meanwhile, Tesla’s US sales dropped an estimated 15% in Q1 2025.

Tesla isn’t out of gas just yet, but the road ahead looks bumpy. If BYD keeps up its aggressive European expansion—and other carmakers continue stepping up their EV game—Musk may need more than a pay package to keep his flagship company in pole position

CNBC, New York Post, the Financial Times contributed to this report.