Tesla suffered a "defeat" in August.

According to US Stock Investment Network, as the global electric vehicle competition intensifies, Tesla is gradually losing its edge in the European market.

Since the beginning of this year, Tesla's sales have been continuously declining in several core countries, and it suffered a "debacle" in August. Sales declined across the board in markets such as France, Sweden, Denmark, and the Netherlands. Only Norway and Spain saw growth, but even so, the growth rate lagged far behind that of Chinese automaker BYD.

This series of data reveals that Tesla is experiencing a multi - dimensional crisis: an aging product line, a deteriorating competitive environment, a collapse in the residual value of the second - hand market, and consumer boycotts due to Elon Musk's political stance, which have quickly dimmed its brand aura in Europe.

From Defeat in Core Markets to Local Rebound

The latest data shows that Tesla almost completely lost ground in its performance in several key European countries in August:

In the French market, Tesla's registrations plummeted by 47.3% year - on - year, while the overall automotive market still recorded a 2.2% increase. In other words, against the backdrop of market expansion, Tesla not only failed to grow but also regressed significantly.

Sweden is an extreme case. Tesla's sales in August dropped by 84%, while the local automotive market as a whole rose by 6%. This divergence shows that Tesla's competitiveness in the eyes of consumers is rapidly declining.

The situations in Denmark and the Netherlands are also not optimistic, with sales dropping by 42% and 50% respectively, indicating an obvious trend of market shrinkage.

Relatively speaking, Norway and Spain have become the few bright spots.

In the Norwegian market, Tesla's registrations increased by 21.3%, but BYD's growth rate was as high as 218%, far outpacing Tesla. In Spain, thanks to the government's electric vehicle subsidy of up to 7,000 euros (about $8,195), Tesla's sales increased by 161% year - on - year to 1,435 units. However, BYD's sales soared by more than 400% to 1,827 units. So far this year, BYD's sales in Spain have surged by 675% to 14,181 units, while Tesla's have only increased by 11.6% to 9,303 units.

Tesla's car sales continue to decline in some European markets

The trend behind these data is extremely clear: Tesla is retreating steadily in most mature European markets and only achieving short - term growth in individual countries stimulated by policies. However, its growth rate is still completely suppressed by BYD.

Disadvantages in Product Cycle and Competitors' Offensives

The decline in sales reflects Tesla's passive position in the European competitive landscape.

European automotive market analyst Matthias Schmidt said bluntly that Tesla's core problem lies in its aging products.

Since the launch of the Model Y in 2020, the company has not released any new mass - market models, while its competitors have been continuously introducing new products. Chinese new - energy vehicle manufacturers, such as BYD, NIO, XPeng, and even ZEEKR, are continuously exporting new models to Europe, covering different market segments from high - end to mass - market. At the same time, traditional European automakers such as Volkswagen, Mercedes - Benz, and BMW are accelerating their electrification transformation, creating a multi - pronged competitive situation.

Figure: In the first seven months of 2025, the proportion of EVs in new car registrations in the EU reached 59%, a record high.

As a result, Tesla's market share in Europe has dropped from 2.5% in 2024 to 1.7%, an astonishing decline. Schmidt even criticized Musk's claim during the July earnings conference call that "there is no problem with European sales," calling it an avoidance of reality and even "close to delusion."

Andy Leland, co - founder of supply - chain consulting firm SC Insights, added that the high growth in Spain in August may be due to concentrated deliveries, and quarterly data are more representative. This means that even in markets where Tesla appears to be performing well on the surface, its fundamentals are not stable.

Musk's Political Shadow

In addition to product disadvantages, Tesla is also facing an "image crisis" in Europe.

Musk's high - profile political actions in recent years have sparked a lot of consumer dissatisfaction. He not only funded Trump's election victory but also publicly supported far - right political parties in Europe. This stance has triggered a boycott in Europe, directly affecting Tesla's sales.

Genie Buckley, CEO of electric vehicle consulting platform Electrifying, said that the website has been tracking consumers' attitudes towards Tesla since the beginning of the year, and the results show that the brand image is becoming increasingly polarized. More than half of the respondents clearly stated that they would not buy a Tesla because of Musk's words and actions.

This means that Tesla is no longer just a technology brand but is gradually being labeled as political. In the European market, which highly values values and public image, this has become a major negative factor.

Side Effects of Price Cuts

Another major dilemma for Tesla comes from its pricing system. To maintain sales, Tesla has frequently cut prices in multiple markets since 2023. However, the direct consequence of this strategy is a significant decline in the residual value of used cars.

Data from UK used - car data agency Marketcheck shows that the sales of used Teslas in July soared by 270% year - on - year. Although it seems prosperous, the reason behind it is a sharp drop in prices. The used price of the Model Y has dropped by 41% compared with the same period last year, making it one of the "fastest - depreciating" models in the market.

For potential car buyers, the risk of "instant depreciation when buying a new car" greatly weakens their willingness to purchase. In the long run, it is naturally difficult to maintain new - car sales.

Summary

The challenges for Tesla in Europe are piling up: weak product updates, fierce market competition, a collapse in the residual value of used cars, and brand damage caused by Musk's personal controversies. In contrast, BYD is quickly seizing the market with its cost - effective models and aggressive expansion strategy, gradually becoming the new protagonist in the European electric vehicle market.

This article is from the WeChat public account "US Stock Investment Network" (ID: tradesmax). Author: US Stock Investment Network. Republished by 36Kr with permission.