Tesla’s EU Sales Decline Amid Surge of Chinese Automakers

Essential brief

Key facts

Tesla’s EU new car sales fell by one-third in November 2025, reducing its market share significantly.

Chinese automakers BYD and SAIC saw rapid sales growth, with BYD nearly tripling registrations year-over-year.

Hybrid vehicles now make up 44% of new car sales in Europe, driven by manufacturer profitability and lobbying efforts.

The EU has relaxed electric vehicle sales targets, allowing 10% of new cars to have combustion engines after 2035.

Despite Tesla’s sales decline, Elon Musk remains the richest person globally, with Tesla’s valuation fueled by investor optimism beyond car sales.

Highlights

Tesla’s EU new car sales fell by one-third in November 2025, reducing its market share significantly.

Chinese automakers BYD and SAIC saw rapid sales growth, with BYD nearly tripling registrations year-over-year.

Hybrid vehicles now make up 44% of new car sales in Europe, driven by manufacturer profitability and lobbying efforts.

The EU has relaxed electric vehicle sales targets, allowing 10% of new cars to have combustion engines after 2035.

In November 2025, Tesla experienced a significant drop in new car registrations across the European Union, selling 12,130 vehicles compared to 18,430 in November 2024.

This decline reduced Tesla’s market share from 2.1% to 1.4%, according to data from the European Automobile Manufacturers’ Association (Acea).

Meanwhile, Chinese automakers saw remarkable growth: BYD’s registrations nearly tripled year-over-year to 42,500, and SAIC, owner of the MG brand, increased sales by 26% to 217,000 units.

Both companies offer battery electric vehicles as well as hybrids, which combine smaller batteries with internal combustion engines.

Hybrids, including plug-in models capable of charging externally, now represent 44% of all new car sales in Europe.

This rise aligns with European manufacturers’ efforts to promote more profitable hybrid vehicles and their lobbying to relax EU electric vehicle sales targets.

Recently, the EU confirmed it will permit 10% of new car sales to feature internal combustion engines after 2035, a concession following industry pressure.

Despite these challenges, battery electric vehicles still grew to 18.8% of the market in the first 11 months of 2025, up from 15% the previous year.

Tesla remains the only pure electric brand tracked by Acea, but its sales slowdown coincided with Elon Musk’s controversial political engagements in Europe and the US.

Musk’s support for far-right groups in Germany and the UK, as well as a public fallout with former US President Donald Trump over electric car subsidies, may have impacted Tesla’s European performance.

Nevertheless, Musk’s personal net worth remains the highest globally, estimated at $647 billion, largely due to SpaceX and Tesla’s stock valued at around $200 billion.

Tesla’s market capitalization exceeds $1.5 trillion, driven more by investor confidence in Musk’s broader vision for robotics and AI than by the company’s automotive fundamentals.

Overall, EU new car sales rose 1.4% year-over-year to 12.1 million vehicles in the first 11 months of 2025, marking the fifth consecutive monthly increase, including data from the European Free Trade Area and the UK.