European drivers can't get enough hybrids and EVs — but that's still not helping Tesla

Business Insider

5 hours ago

Electric and hybrid vehicle sales are surging across Europe, steadily overtaking traditional combustion engines — but Tesla is failing to capitalize on the boom.
According to new data from the European Automobile Manufacturers' Association, battery-electric cars reached a 15.4% market share across the EU from January to May, up from 12.1% in the same period last year.
Hybrid-electric cars did even better, grabbing a commanding 35.1% of the market.
In contrast, petrol and diesel vehicles saw steep declines, with petrol dropping from 35.6% to 28.6% and diesel sliding to just 9.5% in May.
The rapid shift in consumer preference is playing out most visibly in major markets.
Germany, Belgium, and the Netherlands all posted double-digit growth in BEV sales, while France was the outlier with a 7.1% decline.
Hybrid sales skyrocketed in France and Spain, respectively, by 38.3% and 34.9%.
Yet, Tesla's footprint is shrinking.
The EV giant saw a 45.2% drop in EV registrations in the first five months of 2025, plummeting from 91,996 units last year to just 50,413 in the same period in 2025.
According to ACEA data, its EU market share dropped from 1.6% to 0.9% in May, year over year.
Across the wider European region, which also includes Switzerland and the UK, Tesla's slump was nearly as bad: registrations fell 37.1% year over year.
The steep drop-off comes as Tesla battles not just growing competition but a brand crisis in Europe, its third-largest market after the US and China.
The automaker has been criticized amid widespread backlash against CEO Elon Musk, whose political statements have sparked protests and vandalism.
Musk's endorsement of Germany's far-right AfD party and his role in the Trump administration have triggered protests against Tesla showrooms across Europe.
Meanwhile, Chinese EV manufacturers are seizing the moment. BYD, a state-backed Chinese auto giant, overtook Tesla in European EV sales for the first time in April. It sold 7,230 electric vehicles in the region that month, just ahead of Tesla's 7,165, and is expanding aggressively with new models like the budget-priced Dolphin Surf hatchback.
In the UK, where Chinese EVs face no import tariffs, BYD's sales surged more than 400% in May compared to the previous year, while Tesla's plunged 36%.
Analysts say it's a warning sign: without new models and competitive pricing, Tesla risks being outflanked not only by legacy automakers like Volkswagen and Renault, but also by nimble, well-funded Chinese newcomers.
Adding to the pressure is Tesla's much-hyped robotaxi rollout, launched in Austin in June, which remains limited to a small test group.
While the debut sent Tesla's stock soaring and briefly boosted Elon Musk's net worth by $19 billion, analysts caution that the company still faces significant operational and regulatory hurdles before robotaxis can meaningfully impact its bottom line.