Recent vehicle sales data from Europe reveals that Tesla, historically the world’s largest electric vehicle (EV) manufacturer, is losing ground to established automakers like Volkswagen and BMW Group. According to research platform JATO Dynamics, both BMW and Volkswagen sold more EVs than Tesla in the European market in February 2025, signaling trouble for the Texas-based automaker.
After dominating the global EV market for over a decade, Tesla is facing intense competition from both Western and Chinese automakers. In 2024, the company temporarily lost its title as the world’s best-selling EV brand to BYD before reclaiming the top spot later in the year.
However, despite its recovery, 2025 has been a challenging year for Tesla. A significant portion of the company’s struggles can be traced back to CEO Elon Musk, whose political affiliations have had unintended consequences. Musk’s surprise endorsement of former President Donald Trump and his subsequent appointment as the head of the Department of Government Efficiency (DOGE) have alienated a large portion of Tesla’s liberal-leaning customer base.
Furthermore, both Trump and Musk have expressed support for far-right political parties in Europe. Trump, for instance, has promoted Germany’s Alternative für Deutschland (AfD) on X multiple times. This has contributed to a sharp decline in Tesla’s sales in Germany, Europe’s largest automotive market.
In addition to political backlash, Tesla is struggling with increased competition in the rapidly expanding EV sector. The ongoing phase-out of the Model Y, the company’s best-selling electric vehicle, has also impacted sales. According to JATO Dynamics Global Analyst Felipe Munoz, Tesla’s limited vehicle lineup makes it particularly vulnerable to fluctuations in registrations during model transitions.
New Tesla registrations across the European Union, Switzerland, and Norway dropped by a staggering 44% from February 2024 to February 2025, with fewer than 16,000 cars registered this February. This decline has caused Tesla’s European market share to drop to 9.6%, the lowest in five years.
In contrast, Volkswagen’s battery electric vehicle (BEV) sales soared by 180%, reaching nearly 20,000 units, while BMW Group also outpaced Tesla, selling nearly 19,000 BEVs under the BMW and Mini brands. Chinese automakers also outsold Tesla in February, with BYD moving 4,000 units, Polestar selling 2,000, Xpeng delivering 1,000, and Leapmotor registering 900 BEVs.
Tesla’s recent struggles illustrate the increasing competitiveness of the European EV market as legacy automakers and Chinese brands continue expanding their electric vehicle offerings.
With enterprises like SolarBank Corp. (NASDAQ: SUUN) (Cboe CA: SUNN) (FSE: GY2) quickly making their mark in the battery industry, EVs are bound to become more affordable as battery makers compete with each other and lower their prices. The positions at the top of the EV industry could see shifting occupants as companies jostle for dominance.
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