Tesla Inc. (NASDAQ: TSLA) is having a tough stretch in Europe. The company hit some serious bumps last month as new car registrations dropped across several major markets. France saw sales fall 58% to about 1,600 cars, Sweden dropped nearly 60%, and Denmark was off about half. That signals more than just a slow month, it points to growing competition and changing buyer sentiment across the region.
Interestingly, not every country followed that pattern. Norway went in the opposite direction, with Tesla registrations tripling to more than 6,200 vehicles. That gave the brand nearly a third of Norway’s new car market. Local tax changes likely helped, pushing buyers to act before incentives fade.
So what’s behind the slump elsewhere? In short: tougher competition and shifting tastes. Chinese brands like BYD are flooding the market with new, lower-priced EVs. At the same time, Tesla’s lineup, especially the Model Y, feels a bit stale to some buyers despite its recent update. In Denmark, Model Y sales dropped 74%, while the smaller Model 3 actually rose nearly 30%. Sweden saw a similar split, with Model Y demand falling sharply.
Add to that a few self-inflicted wounds. Tesla’s market share across Europe slipped to around 1.6%, down from 2.4% a year ago, and lingering backlash from Elon Musk’s public remarks hasn’t helped. Even with its Berlin factory running, production isn’t the problem, it’s demand. German sales have slumped too, showing that building locally doesn’t guarantee local success.
Meanwhile, competitors are gaining ground fast. Chinese brands now hold around 7% of the European market, a huge jump from last year. European shoppers also say Tesla is losing its design edge, with one survey finding nearly 40% view the brand as falling behind in style and appeal. Policy shifts are another drag, with shrinking EV subsidies making plug-in hybrids look more attractive for many buyers.
Tesla has started rolling out cheaper Model Y versions around 40,000 euros in Germany, but they arrived late and in limited supply. Even BYD’s sales dipped in Norway, proving that incentives and timing still matter. Overall, Europe’s message to Tesla is clear: the company needs to move faster, on pricing, product updates, and perception, if it wants to stay ahead in a market that’s evolving quickly.
