Tesla sales drop again around Europe despite Model Y revamp

The new Model Y has an estimated range of 320 miles, roughly in line with the company’s current long-range version. Photographer: Yuki Iwamura/Bloomberg

Registrations of new Tesla TSLA.O cars in several key European markets fell in July, despite a revamp to its signature Model Y, as the EV maker struggles with a backlash against CEO Elon Musk’s political views, regulatory challenges and rising competition.

Tesla’s aging lineup is facing a wave of low-cost EV rivals, especially from China. It is rolling out a revamped Model Y and starting to produce a new, cheaper model, but production of that will only ramp up next quarter, later than initially expected.

The brand’s registrations - a proxy for sales - fell 86 per cent year-on-year in July to 163 cars in Sweden, 52 per cent to 336 cars in Denmark, 27 per cent to 1,307 in France, 62 per cent to 443 in the Netherlands and 58 per cent to 460 in Belgium, official industry data showed, marking a seventh straight monthly drop in all of those countries.

They also fell by five per cent to 457 cars in Italy and 49 per cent to 284 in Portugal.

Tesla sales dropped by over a third in Europe in the first six months of the year.

Norway and Spain bucked the trend, with Tesla’s July registrations up 83 per cent and 27 per cent to 838 cars and 702 cars, respectively.

Spain recorded a 155 per cent jump in total sales of electrified cars - either battery electric or plug-in hybrid. Tesla’s Chinese competitor BYD 002594.SZ sold 2,158 cars in Spain in July, almost eight times more than in July 2024.

With no more affordable-end vehicles on the horizon until the last three months of the year and the upcoming end of a US$7,500 U.S. tax break for EV buyers, Musk acknowledged in July that Tesla TSLA.O could have “a few rough quarters.”

He said tough automated driving regulations in Europe made it harder to sell the Model Y in some countries, as the vehicle’s optional supervised self-driving is “a huge selling point.”

“Our sales in Europe, we think will improve significantly once we are able to give customers the same experience that they have in the U.S.,” he told analysts.

Tesla began selling a long-range four-wheel version of the revamped Model Y in Europe in March 2025, while sales of the two rear-wheel drive variants began in May.

Model Y registrations in Sweden and Denmark fell by 88 per cent and 49 per cent respectively in July, while they jumped more than fourfold to 715 cars in Norway.

Norway, where almost all new cars sold are fully-electric and where Tesla has been the best-selling brand since 2021, has seen a surge in orders for the model since May after the automaker launched zero per cent interest loans in some Nordic countries to drum up demand.

Tesla launched in June a trial robotaxi service in Austin, Texas, using about a dozen Model Y SUVs controlled by its autonomous-driving software. But the roll-out of its self-driving features elsewhere in the U.S. is bogged down because it hasn’t received the required permits.

Overall car sales were up 20 per cent in Denmark, six per cent in Sweden, 48 per cent in Norway, 17 per cent in Spain, nine per cent in the Netherlands and 21 per cent in Portugal, while they slid eight per cent in France, five per cent in Italy and two per cent in Belgium in July, industry data showed.

Germany and the UK are expected to release July car sales next week.

European automakers Volkswagen VOWG.DE, Mercedes-Benz MBGn.DE, Stellantis STLAM.MI, Renault RENA.PA and BMW BMWG.DE have published downbeat second-quarter results, warning of pressure from U.S. import tariffs and falling demand.

(Reporting by Alessandro Parodi, Camille Raynaud, Louise Rasmussen, Marie Mannes, Terje Solsvik, Inti Landauro, Javi West Larrañaga and Bart Meijer; Editing by Himani Sarkar, Mark Potter and Louise Heavens)