The European Automobile Manufacturers' Association released statistics on Thursday showing that European new car sales increased 5.9% year-over-year in July, primarily driven by strong demand growth in the German market that offset declining demand in the UK, France, and Italy.

Despite overall electric vehicle sales rising in the European market, US electric vehicle giant Tesla Motors (TSLA.US) has experienced a "devastating decline" in European market share for seven consecutive months. In July, Tesla Motors' new car sales in Europe plummeted by over 40%, falling behind Chinese electric vehicle competitor BYD Co., Ltd., which was included in European monthly sales data for the first time.

European electric vehicle statistics show that under the July European monthly statistical framework (including EU + UK + EFTA), BYD Co., Ltd. held a 1.2% market share in Europe, higher than Tesla Motors' approximately 0.8%, making BYD Co., Ltd. the market share leader for the month.

In recent years, major European automakers like Volkswagen have been developing new electric vehicle models to defend against Tesla Motors and Chinese electric vehicle competitors in Europe's growing EV market, while profitably complying with regulatory requirements encouraging European automakers to promote electric vehicles.

European Automobile Manufacturers' Association (ACEA) CEO Ola Kaellenius joined others Wednesday in writing to European Commission President Ursula von der Leyen, stating that EU targets for reducing European vehicle CO2 emissions (including 100% passenger car emission reduction by 2035) are no longer viable.

European automakers have collectively recorded billions of dollars in losses, with companies like Renault issuing profit warnings. Several European manufacturers mentioned significant negative impacts from US import tariffs in their latest financial reports, making it difficult for these European automotive leaders to achieve profitability.

**Latest European Automotive Market Data Overview**

ACEA statistics show that July new car sales across Europe (EU + UK + EFTA) rose to 1.09 million vehicles.

Volkswagen and Renault's new car registrations increased 11.6% and 8.8% year-over-year respectively, while Stellantis unexpectedly declined 1.1%.

Pure electric vehicle-focused Tesla Motors saw monthly sales drop significantly by 40.2% year-over-year, with its European market share severely compressed from 1.4% a year ago to 0.8%. BYD Co., Ltd., also focused on electric vehicles and one of Tesla Motors' major competitors, saw European monthly sales surge 225.3%, achieving a 1.2% market share.

EU countries' overall automotive sales increased 7.4% year-over-year. New car registrations for pure electric, hybrid, and plug-in hybrid vehicles increased 39.1%, 56.9%, and 14.3% respectively, accounting for approximately 59.8% of EU registrations, up from 51.1% in July 2024.

Germany's overall automotive sales achieved 11.1% year-over-year growth in July, while the UK market declined 5%, France fell 7.7%, and Italy decreased 5.1%. Spain, Poland, and Austria saw overall automotive sales increases of 17.1%, 16.5%, and 31.6% respectively.

**Tesla Motors Continues "Major Collapse" in European Market**

Despite significant improvements to the iconic global Model Y, electric vehicle leader Tesla Motors still experienced substantial declines in new car registrations across multiple key European markets in July, highlighting the US electric vehicle manufacturer's struggles with CEO Elon Musk's aggressive political positions toward Europe, autonomous driving regulatory challenges, and increasingly fierce electric vehicle market competition.

Tesla Motors' aging electric vehicle product lineup faces a wave of low-cost electric vehicle competitors, particularly from Chinese electric vehicle rivals. The electric vehicle leader is launching a redesigned Model Y and beginning production of a cheaper new model, but production of the redesigned electric vehicle model won't significantly increase until next quarter, later than initially expected.

Tesla Motors is not expected to launch more affordable entry-level electric vehicle models before the final three months of this year, while the US market's $7,500 vehicle tax credit is set to expire. Musk acknowledged in July that Tesla Motors might face "several very difficult quarters."

He stated that exceptionally strict autonomous driving regulations from European regulators make it more difficult to increase Model Y sales growth and promote FSD full self-driving service subscriptions in some countries. In certain European markets, Tesla Motors Model Y's optional supervised autonomous driving system is "a major selling point."