Tesla’s European sales dropped sharply in 2025, falling nearly 27% as the company lost market share across the region. At the same time, rival BYD recorded rapid growth, narrowing the gap with the U.S. electric vehicle maker.
Tesla sold 238,656 vehicles across the European Union, the euro free trade area, and the UK in 2025, down from 326,525 units a year earlier. The company’s regional market share also declined, sliding to 1.8% from 2.5%.
By contrast, BYD posted explosive growth in Europe, with sales jumping 268.7% to 187,657 vehicles. Its market share climbed to 1.4% in 2025, up from just 0.4% the previous year.
BYD’s momentum was fueled by strong demand for its lower-priced electric and hybrid vehicles. European consumers, increasingly focused on affordability, favored the company’s hybrid models, giving BYD an advantage over Tesla, which currently sells only fully battery-powered EVs.
Industry data from the ACEA showed that hybrid vehicles accounted for 34.5% of Europe’s auto market in 2025. In comparison, battery electric vehicles made up 17.4% of total sales.
Despite the broader decline, Tesla showed modest improvement toward the end of the year. In December, sales were still down 20% year-on-year but rose significantly compared with November levels.
Even so, Tesla recorded another annual drop in European sales, following a 10.8% decline in 2024. The company continues to face intensifying competition from both traditional automakers and hybrid-focused brands.
Consumer skepticism toward Tesla’s autonomous driving ambitions also weighed on demand, while waning sentiment toward CEO Elon Musk further pressured sales across the region.
Meanwhile, BYD continued to gain market share despite steep European import tariffs on Chinese-made EVs. Recent reports suggest the EU may be preparing to roll back these tariffs — a move that could further boost BYD’s sales and accelerate its expansion in Europe.
