MW Tesla's European sales are backsliding as China encroaches further on the market

By William Gavin

Chinese carmakers have been aggressively ramping up their expansion in Europe

Chinese electric-vehicle manufacturer BYD's sales in the broader European market grew 398% year over year in September.

Tesla Inc.'s sales in Europe are on the decline as Chinese companies, including rival BYD Co., continue to increase their share of the market.

September sales for Tesla in Europe fell 10.5% to 39,837 all-electric vehicles sold, putting the company's share of the European electric-vehicle market at 3.2%, down from 4% a year earlier, according to the European Automobile Manufacturers' Association, or ACEA. Tesla sold 25,656 electric vehicles in the E.U. last month, down 18.6% compared with a year earlier.

Meanwhile, Chinese carmakers have been aggressively ramping up their expansion to Europe in recent years, breaking ground on new facilities and beginning production across the region. China, which has heavily invested in its domestic car industry, exported almost 1.25 million electric vehicles abroad in 2024, according to the International Energy Agency.

In September, BYD's (CN:002594) sales in the broader European market - which includes the E.U., the U.K., Iceland, Liechtenstein, Norway and Switzerland - grew 398% year over year to 24,963 units, the ACEA said Tuesday. BYD's market share grew to 2% from 0.4% last year.

And fellow Chinese carmaker SAIC Motor Corp. (CN:600104), which owns the British brand MG, saw its sales grow 75.5% to 33,924 cars sold, up from 19,334 in September 2024. It now controls 2.7% of the market, up from 1.7%.

The challenges Tesla is facing in Europe come amid broader struggles for the company. Over the first nine months of 2025, Tesla $(TSLA)$ sales dropped by almost 29% from the prior year. Its latest decline in the market comes even as the EV maker reported record sales for the July-to-September quarter, fueled by an expiring tax credit in the U.S.

Tesla has had a particularly rough year in Europe, partially as a result of its CEO Elon Musk weighing in on other countries' politics and his relationship with the Trump administration, which sparked mass protests against the brand. In a push to drive up sales globally, Tesla released new versions of its Model Y SUV and Model 3 sedan that lack some features and are several thousands of dollars cheaper, but they aren't available in every market.

While that may help Tesla compete with rivals, the Model Y still costs around EUR40,000 (equivalent to about $46,650) in some markets, according to the company's website. And an array of budget EVs are already available in Europe from both European and Chinese brands. More are expected to join that lineup, with Volkswagen AG (XE:VOW3) planning to begin selling new models that start at around EUR25,000 next year.

The overall EV market has been growing, according to the ACEA, which noted that sales of battery-electric vehicles grew 20% year over year in September. Compared with a year earlier, sales of plug-in hybrid vehicles grew 65.4% last month for a seventh consecutive month of growth, while sales of hybrid electric vehicles grew 16%.

-William Gavin

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October 28, 2025 13:29 ET (17:29 GMT)

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