Tesla’s European fortunes have taken another hit. After a brief recovery in September, the electric vehicle (EV) maker has once again slipped into decline, with sales plummeting across several key markets in October. The drop contrasts sharply with broader EV growth across Europe and renewed momentum for Tesla in the US, though that too may prove short-lived.
European Sales Nosedive Despite EV Market Boom
Data compiled from new car registrations, a common indicator of actual sales, paints a grim picture for Tesla in Europe. Registrations were down 89% in Sweden, 86% in Denmark, 50% in Norway, and 31% in Spain during October, according to Reuters.
Overall, Tesla’s European sales fell nearly 30% through the first nine months of 2025 compared to the same period last year. The timing couldn’t be worse: across the continent, fully electric and plug-in hybrid sales jumped a massive 119% in the same window.
The lone bright spot was France, where Tesla managed to post a modest increase for the second consecutive month, a rare win in a region that’s otherwise turning away from the brand.
Aging Lineup, Fierce Competition
Analysts point to a simple culprit: Tesla’s lineup is getting old. While competitors like BYD, NIO, and MG have flooded Europe with new models offering better pricing and features, Tesla continues to rely on its core range, comprising the Model 3, Model Y, and two high-end vehicles that appeal to a narrow segment of buyers.
The company’s once-dominant market position has eroded as Chinese automakers gain traction with budget-friendly EVs that meet local needs. Even legacy European brands like Volkswagen and Renault have started catching up, investing heavily in electric platforms designed for affordability and regional preferences.
US Sales Soar Before Tax Credit Deadline
Across the Atlantic, Tesla’s third-quarter numbers told a different story. US sales hit record highs, fueled by a surge of buyers looking to lock in federal EV tax credits before they expired. However, that momentum is expected to fade quickly.
Tesla’s US market share dropped below 40% for the first time in August, and overall sales were down 13.5% in the second quarter. Analysts warn that the temporary Q3 boost could lead to another dip in Q4 once tax credit-driven demand fades.
China’s Decline Adds to Pressure
The pressure isn’t confined to Europe. Tesla’s sales in China, its largest overseas market, also fell nearly 10% in October after a modest 2.8% gain in September. Domestic rivals are proving even tougher there, leveraging price wars and faster product cycles to capture consumers.
The ‘Musk Effect’ and Investor Anxiety
Elon Musk’s public persona continues to cast a long shadow over Tesla’s brand perception, particularly in Europe. His polarizing political affiliations and controversial ventures outside Tesla, from cryptocurrency speculation to his leadership of X (formerly Twitter), have reportedly alienated a segment of potential buyers.
That tension could reach a new peak this week at Tesla’s annual shareholder meeting on November 6. Investors will vote on whether to approve Musk’s massive $1 trillion pay package. Board chair Robyn Denholm insists the payout is crucial to retaining him, but the decision comes at a time when Tesla’s global performance is under more scrutiny than ever.
A Crossroads for Tesla
Between declining European sales, intensifying competition in China, and uncertainty in the US market, Tesla faces a defining few months. The brand that once symbolized the future of electric mobility now finds itself fighting to stay ahead in a market it helped create.
Whether the company can reignite its European presence or risks ceding the continent to faster, fresher rivals will likely define Tesla’s next chapter.
