Tesla Inc. is grappling with a sharp downturn in its European business, posting some of its steepest sales declines of the year across key markets. The electric carmaker, led by Elon Musk, has seen registrations plummet in several countries, underscoring its deepening struggles in a region that was once a cornerstone of its global expansion.
The most severe drop came in Sweden, where Tesla registered just 133 new cars in October — an 89% collapse from a year earlier, according to the nation’s auto manufacturers’ association. Sales in Norway and the Netherlands were cut roughly in half, while Spanish registrations declined nearly 31%. France stood out as the only bright spot, with a modest 2.4% year-on-year increase in October, though that rise came after a 47% plunge in the same month last year. Across the first 10 months of 2025, Tesla’s overall European registrations were down by about 30%.
The company’s European woes contrast sharply with its recent record quarter in the United States, where Tesla benefited from a rush of buyers seeking to claim $7,500 federal tax credits for electric vehicle purchases before they expired at the end of September. In Europe, however, the company has struggled for several quarters amid an aging product lineup, intensifying competition from legacy automakers, and backlash linked to Musk’s political activities, including his association with the Trump administration.
Tesla executives have partly attributed the slump to production disruptions related to the redesigned Model Y, its best-selling vehicle. The company said earlier this year that transitioning to the refreshed version temporarily limited output. Yet months after deliveries of the updated Model Y began in Europe, sales remain weak in most markets even as overall EV demand continues to grow.
The contrast is particularly stark in Germany, Europe’s largest auto market. Battery-electric vehicle registrations there surged 38% in the first nine months of the year, according to the latest available data. Tesla’s own sales, however, dropped by 50% during the same period — a sign that competitors are rapidly gaining ground in what was once Tesla’s strongest overseas arena.
The deepening slump highlights the challenges Tesla faces as it contends with mounting competition from European and Chinese automakers, a shifting political climate, and questions about whether Musk’s outspoken public persona is alienating buyers in one of the world’s most climate-conscious regions.
