Tesla's European sales drop for fifth straight month, unnerving investors

First Post

26-06-2025

Data by the European Automobile Manufacturers' Association shows that Tesla sales fell by 28 per cent last month in 30 European countries, even as the overall market for electric vehicles expanded sharply read more
Elon Musk's exit from the White House and his resignation from Doge have not been able to turn Tesla's fortunes in Europe, as sales slumped for the fifth month in a row in May, causing jitters among investors who had hoped anger towards the company's CEO would have gone down by now.
Data by the European Automobile Manufacturers' Association shows that Tesla sales fell by 28 per cent last month in 30 European countries, even as the overall market for electric vehicles expanded sharply.
STORY CONTINUES BELOW THIS AD
The poor showing comes after Tesla's billionaire CEO had promised a 'major rebound' was coming last month, adding to a recent buying frenzy among investors.
Musk had said Tesla was sure to get a boost once the company was done retooling its factories to produce a new version of its biggest seller, the Model Y. But that was finished months ago, and the new models are widely available. Investors are now hoping that a cheaper Tesla expected to be out later this year will help reverse the sales decline.
The problem of a slump in sales is being felt by Tesla alone, as overall purchases of electric vehicles rose 25 per cent in Europe compared to a year earlier. China's SAIC Motor was the big winner for the month with its European sales of EVs and other kinds of cars jumping 38 per cent.
Tesla's robotaxi
The record decline in sales comes at a time when Tesla is conducting test drives of its driverless 'robotaxis' service in Austin, Texas. Musk has pinned hopes on robotaxis' success for Tesla's financial future.
However, the test drives hit a snag after the flagship robotaxis encountered several issues during the trial runs, including entering the wrong lane, dropping passengers off in the middle of multiple-lane roads or at intersections, sudden braking, speeding and driving over a curb.
In one instance, a robotaxi drove into a lane meant for oncoming traffic for about 6 seconds. It had pulled into an intersection in its left-turn lane with its turn blinker on. Then the steering wheel wobbled momentarily, and instead of turning, it proceeded straight into the lane meant for oncoming traffic, prompting a honk from a car behind it.
STORY CONTINUES BELOW THIS AD
In another incident, the car suddenly braked with no obstruction apparent in the video. The passenger jerked forward and their belongings were thrown to the floor. In a third video, taken from another vehicle, a robotaxi abruptly stopped twice in the middle of the road while passing police vehicles with flashing lights.
Why have Tesla's sales dropped?
Analysts attribute Tesla's struggles to growing competition from Chinese brands, EU tariffs on Chinese EVs, and consumer backlash against CEO Elon Musk's political affiliations and activism in Europe.
Musk downplayed the issue, calling the European market 'quite weak,' but data shows rising EV adoption overall, suggesting Tesla is losing market share rather than the market shrinking.
Tesla's Berlin Gigafactory supplies Europe but has faced production retooling delays and market headwinds, contributing to the sales slump.
With inputs from agencies