Tesla’s market share in Europe fell sharply in July 2025, as Chinese automakers BYD and SAIC overtook the U.S. electric vehicle maker in new car registrations, according to data from the European Automobile Manufacturers’ Association (ACEA).
ACEA reported that Tesla registered 6,600 new vehicles in the EU last month, a 42% drop compared to the same period in 2024. By contrast, BYD tripled its registrations to 9,698, surpassing Tesla for the first time, while SAIC, the parent company of MG, also outperformed the American firm.
“This marks a considerable shift in the balance of power in the European electric vehicle market, as Chinese companies further expand their footprint and Tesla continues to lose ground,” ACEA said in its July report.
The broader EU car market grew by 7.4% year-on-year in July, reversing a decline seen in June. German manufacturers posted gains, with Volkswagen leading the pack, followed by BMW and Mercedes-Benz. Hybrid vehicles accounted for 34.7% of total registrations, while battery-electric cars held a 15.6% share.
Tesla’s sales decline comes as Chinese brands gain recognition by offering lower-priced models, intensifying competition in Europe’s crowded EV segment. Analysts warn the U.S. company may need to expand its lineup and reconsider pricing to remain competitive.
The company’s longer-term prospects may also be influenced by regulatory developments. The European Union is targeting a 55% cut in CO₂ emissions from cars by 2030 and plans to phase out combustion engine sales by 2035, measures that could further reshape the market.