Tesla's vehicle sales in Europe declined for a fifth consecutive month in May, dropping 27.9% year-over-year to 13,863 units, according to data released Wednesday by the European Automobile Manufacturers Association (ACEA). The slide comes amid growing competition from Chinese electric vehicle makers and mounting reputational issues linked to CEO Elon Musk.
Tesla's market share in the European Union, United Kingdom, and European Free Trade Association has fallen to 1.2%, down from 1.8% a year earlier. The downturn comes despite a 27.2% increase in electric vehicle registrations overall during the same period, highlighting the company's worsening competitive position.
The brand's troubles are compounded by an increasingly volatile public image. Musk, who previously served in a cost-cutting role within the Trump administration, drew widespread criticism after spending nearly $300 million to support President Trump's re-election. Protests erupted at Tesla dealerships across Europe in response, and backlash intensified after Musk publicly feuded with Trump in early June, including unsubstantiated remarks about Epstein files. Tesla's market cap reportedly lost $99 billion in a single day following the online exchange.
Tesla has also faced scrutiny over its aging product line. Analysts point to a lack of fresh model launches compared to aggressive new rollouts by Chinese and European automakers. Although a refreshed Model Y was introduced in March and saw modest success in Norway, it has not reversed Tesla's overall regional sales slide.
China's BYD, which overtook Tesla in European EV sales in April, came close to matching Tesla's registrations again in May. Chinese automakers collectively sold 65,808 units last month and grew their market share to 5.9%, according to JATO Dynamics. "Despite the EU's imposition of tariffs on Chinese electric vehicles, its car brands continue to post strong growth across Europe," said Felipe Munoz, global analyst at JATO. "Their momentum is partly due to their decision to push alternative powertrains, such as plug-in hybrids and full hybrids, to the region."
Shares of Tesla remain down more than 15% year-to-date despite several sharp rebounds. The stock surged after the company's robotaxi prototype soft-launched in Texas earlier this week, gaining 5% before news broke that a U.S. safety agency had contacted Tesla over footage showing erratic self-driving behavior.
