Chinese electric vehicle maker BYD has once again overtaken Tesla in European sales, reinforcing a trend with far-reaching consequences. In July 2025, BYD outpaced Tesla by delivering 13,503 units, a year-on-year surge of 225%, while Tesla’s sales landed at 8,837 units, marking a 40% decline. CNBC
This turnaround not only highlights Tesla’s weakening grip—but also underscores BYD’s rapid ascent in one of the world’s most competitive EV markets.
BYD’s Rise: What’s Driving It?
- Massive Sales Growth: BYD’s European presence surged dramatically across 2025. Its registrations rose over 250% year-to-date, beating Tesla in market share for the first time.
- April Milestone: In April, BYD recorded 7,231 BEV sales, narrowly topping Tesla’s 7,165 units, representing the first time BYD surpassed Tesla in European battery-electric vehicle sales.
- Strategic Advantages:
- Diverse Product Lineup: BYD’s range includes both BEVs and plug-in hybrids (PHEVs), serving a wide spectrum of consumer needs—especially where PHEVs aren’t subject to EU tariffs.
- Aggressive Pricing: Thanks to Blade LFP battery tech, BYD offers vehicles at 20–40% lower prices than Tesla, without compromising on features.
- Local Expansion: Targeted investments—such as a new manufacturing plant in Hungary—further bolster BYD’s European reach.
Tesla’s Slip: What’s Behind the Decline?
- Aging Models: Tesla’s lineup, particularly the Model 3 and Y, are growing dated and face fierce competition from more modern rivals.
- Brand Erosion: Public controversies tied to CEO Elon Musk have dampened Tesla’s image in Europe, alienating part of its consumer base.
- Macro Pressures: The removal of subsidies, elevated interest rates, and production bottlenecks have further weighed on Tesla’s competitiveness and margin structure.
What This Means for the EV Landscape
- Strategic Rethink Required: Legacy and new EV players must prioritize affordability, localization, and broader powertrain offerings to compete effectively.
- Policy Impact Looms: Regulators face a balancing act—protecting domestic automakers while nurturing green innovation.
- Tesla’s Crossroads: To regain momentum, Tesla may need to expedite line-up refreshes, expand local production aggressively, and revamp its brand positioning in Europe.
