Tesla’s European Woes Mount With 5th Straight Month Of Sharp Sales Decline

Tesla saw another steep decline in their European Union sales during May. 

The European Automobile Manufacturers’ Association (ACEA) reported that Tesla's vehicle registrations in the EU declined by 40.5% year over year to 8,729 units in May. 

The vehicle count across broad Europe including EEA countries like U.K., Norway, Switzerland, Iceland and Liechtenstein dropped by 27.8% to reach 13,863 vehicles, according to a Wall Street Journal report.

This marks the fifth consecutive month Tesla has seen double-digit percentage declines in EU registrations. 

The company has yet to report a single month of growth in the region in 2025.

In contrast, demand for battery-electric vehicles (BEVs) across the EU continued to grow. Sales were up 25% in May from a year earlier. 

Improvements in Germany, Belgium and the Netherlands drove market growth, which helped BEVs achieve a 15.4% market share year-to-date, up from 12.1% from last year.

Tesla’s slump comes as the EV market faces heightened competition from Chinese automakers and increased political scrutiny of CEO Elon Musk. 

The company is also contending with changes in incentives and evolving consumer tastes.

Looking at the broader market, hybrid-electric vehicles now command the largest share of new registrations in the EU at 35.1%, followed by petrol and diesel cars at a combined 38.1%, down from 48.5% a year ago. 

Plug-in hybrids climbed to an 8.2% share. Overall, EU car sales have slipped 0.6% year-to-date, though May saw a modest 1.6% uptick from a year earlier.

The EU sales slump adds to recent concerns raised by analysts about Tesla’s near-term growth prospects. 

In a research note, Goldman Sachs analyst Mark Delaney reiterated a ‘Neutral’ rating on the stock and a 12-month price target of $285, cautioning that the market may be overestimating how quickly Tesla’s newly launched robotaxi service, Cybercab, can scale. 

In the first quarter of 2025, the company made global deliveries of 336,681 units, down nearly 13% year-on-year, marking its worst quarterly performance in at least two years. 

Tesla attributed the drop to production downtime tied to a Model Y line upgrade following the January launch of a refreshed SUV.

Premium models such as the Model S, X, and Cybertruck, which are all built in California, made up just 4% of total deliveries in the quarter, with 12,881 units delivered.

Tesla’s stock has declined 10.2% so far in 2025.

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