Tesla Struggles in the European Market
"Weighed Down by Owner Risk, Pressured by BYD" Amid Mounting Market Challenges
EU Moves to Counter Chinese EVs with Subsidies

Tesla's sales in Europe have plummeted, with the company selling only 7,261 vehicles across the EU, EFTA, and the UK in April—a 49% drop compared to the same period last year. This decline occurred despite the launch of a new Model Y variant in March. From January to April, Tesla sold a total of 61,320 electric vehicles in Europe, marking a 39% decrease year-over-year.

Musk's Political Involvement Raises Concerns

One contributing factor to Tesla's declining sales is CEO Elon Musk's political activities. Since the start of Trump's second term, Musk has taken on a more active political role, including his appointment as head of the U.S. Department of Government Efficiency (DOGE). He has also appeared in videos supporting Germany's far-right Alternative für Deutschland party and criticized UK politicians like Prime Minister Keir Starmer on social media.

These actions have sparked protests at Tesla dealerships in countries including the U.S., Canada, the UK, Germany, and Portugal. Some demonstrations have resulted in vandalism, with vehicles set on fire in France and Germany. In the U.S., the Cybertruck has become a symbol of anti-Musk sentiment, with social media videos showing the vehicle covered in trash or used as a skateboard ramp.

A Yahoo News and YouGov poll of 1,677 U.S. adults found that 67% have no intention of owning or leasing a Tesla in the future, with 37% attributing their reluctance to Musk's behavior.

BYD's Rapid Growth in Europe

Chinese automaker BYD is rapidly gaining ground in Europe, registering 7,231 battery electric vehicles (BEVs) in April—just shy of Tesla's numbers. BYD's success is largely due to its competitive pricing strategy. Models like the Dolphin Surf, Atto 3, Seal U, Han, and Seagull offer performance at lower prices compared to competitors.

For instance, the Dolphin Surf is priced at USD 26,136, significantly undercutting rivals like the Renault Zoe (USD 37,506) and Volkswagen ID.3 (USD 44,331). The Atto 3 SUV sells for USD 43,175, over USD 1,137 cheaper than Tesla's Model Y (USD 51,017). The Han sedan is priced at USD 80,463, compared to the Model S at USD 107,957. The Seagull, a compact EV, is available for USD 10,842, more than 50% less than the Dacia Spring (USD 23,639).

EU Considers Incentives to Counter Chinese EVs

In response to the growing presence of Chinese EVs, the EU is exploring a pan-European subsidy program to support its automotive industry. At the World Economic Forum in Davos, EU Commissioner Teresa Ribera announced plans to consolidate existing national incentives into a unified EU-wide scheme.

Currently, some EU countries are reducing EV subsidies. The UK ended its program in 2023, France cut subsidies from USD 7,954 to USD 4,545, the Netherlands is phasing out vehicle tax reductions, and Denmark plans to eliminate registration tax benefits starting next year gradually.

A market expert cautioned that offering subsidies exclusively to European-made vehicles could provoke backlash from the U.S. and China and potentially violate WTO rules. The EU must design a "smart" incentive program that minimizes international friction while preventing subsidies from benefiting Chinese manufacturers.