Sales of new vehicles plunged over 40% in Europe as CEO Elon Musk’s involvement in politics weighed on the brand

Tesla’s European sales fell in July, marking a seventh straight monthly decline, while Chinese competitor BYD posted sharp gains, according to the European Automobile Manufacturers Association (ACEA).

Elon Musk’s company has been grappling with mounting challenges in Europe, where fierce competition and reputational damage tied to the billionaire’s political involvement has weighed on the brand.

Tesla sold 6,600 cars in the EU in July, down from 11,465 a year earlier, ACEA data showed. By contrast, Chinese rival BYD sold 13,503 units, a 225% annual increase. Tesla’s drop came even as overall battery-electric vehicle sales in the bloc jumped 39%.

Musk inflamed sentiment across Europe by wading into politics – expressing support for right-wing candidates, calling British Prime Minister Keir Starmer “evil” and saying he belonged in prison. He also warned Germans that “things will get very, very much worse” if they did not vote for the AfD party. The remarks triggered protests: in Milan, demonstrators hung an effigy of Musk, while in London posters were seen likening him to a Nazi.

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Tesla’s global performance is also faltering, as vehicle sales revenue declined in the second quarter and Musk warned that they could face “a few rough quarters” ahead.

The US automaker also faces pressure from Chinese rivals rapidly expanding in Europe with aggressive model launches. BYD has been at the forefront, rolling out competitively priced cars and opening showrooms across the continent over the past two years. Chinese brands captured more than 5% of the European market in the first half of the year – their highest share on record, according to JATO Dynamics.

Experts note one challenge for Tesla is the lack of a major update to its lineup. Earlier this year, the company said it was developing a more affordable electric model, with volume production slated for the second half of 2025 – an announcement investors hope will help revive sales.

slump

Tesla sales slump in Europe – data

Tesla sales slump in Europe – data

German economy in structural crisis – Merz

German economy in structural crisis – Merz