Tesla loses market share in Europe for sixth straight month as competition grows

U.S. electric vehicle maker Tesla lost market share in Europe for the sixth straight month in June, according to the European Automobile Manufacturers Association, or ACEA, amid a broader regional dip in new car sales.

Data published Thursday by ACEA, an industry lobby group, found that Tesla’s market share in the European Union, Britain and the European Free Trade Association fell to 2.8% in June, from 3.4% last year.

Tesla’s new car registrations, meanwhile, declined to 34,781 units in June, down 22.9% from the same month in 2024.

The figures reaffirm a downward regional trend for the company, which continues to face robust competition and reputational damage from CEO Elon Musk’s incendiary rhetoric and relationship with the Trump administration.

“We do see Tesla sales continuing to struggle across Europe. Even where sales have returned to growth, such as here in the UK, they are growing far more slowly than the overall EV market,” Ben Nelmes, founder of EV data analysis firm New AutoMotive, told CNBC by email.

It wasn’t just Tesla that reported a drop in new car registrations in June. The four best-selling automakers in Europe all sold fewer cars last month.

Registrations at Volkswagen and Jeep maker Stellantis reported a year-on-year fall of 6.1% and 12.3%, respectively, while Renault and Hyundai also posted a drop in sales.

Europe’s auto giants have recently sounded the alarm as they struggle to get to grips with several industry challenges, including tough competition from Chinese car brands and U.S. import tariffs of 25%.

ACEA’s data showed car sales across Europe fell to 1.24 million cars in June, reflecting a 5.1% year-on-year decline.

Separate data published Wednesday by JATO Dynamics showed the market share of Chinese car brands in Europe almost doubled over the first half of the year, hitting a new record of 5.1%

BYD, Leapmotor and Xpeng were identified as among the Chinese automakers driving this rapid growth.

“The updated Tesla Model Y has so far failed to provide the expected sales boost for the brand,” Felipe Munoz, global analyst at JATO Dynamics, said in a statement.

“At the same time, competition from BYD and Volkswagen Group is making it harder for Tesla to maintain its leadership position.”

Tesla’s struggles in Europe come shortly after Musk on Wednesday warned that the company “could have a few rough quarters” ahead as it faces higher tariff costs and the expiration of federal EV tax credits in the U.S.

New AutoMotive’s Nelmes said Tesla faces “significant headwinds” with the loss of income from sales of U.S. regulatory credits.

“I have no doubt the company will survive — but it is looking more likely to be a niche brand in a bigger electric car market,” Nelmes said.

“The company’s biggest hope is to do what it did best at first, which is to use new technologies to disrupt a market that is dominated by slow moving incumbents, either through electrification or through autonomous vehicle technology, or perhaps through something else entirely,” he added.

— CNBC’s Lora Kolodny contributed to this report.