Tesla Sales in Europe Fell Nearly 40% in 2025 as Competition Intensified and Demand Weakened

The year 2025 ended extremely poorly for Tesla in Europe. According to data from France’s national automotive association and other regional registration authorities, the automaker suffered a dramatic collapse across several key European markets, highlighting a rapid erosion of its position. In France, Tesla delivered just 1,942 vehicles in December, representing a 66% year-over-year decline. Sweden saw an even sharper downturn, with December deliveries plunging by 71%. Full-year figures offered little relief, as Tesla’s total sales in Sweden for 2025 were 67% lower than in 2024.

Electric Vehicles Are Growing — Tesla Is Not What makes the decline particularly striking is that it occurred during a period of strong growth for electric vehicles across Europe. Registrations of battery-electric vehicles increased by 27% during the first eleven months of the year, while Tesla’s registrations over the same period fell by 28%. This divergence suggests the problem lies not with EV demand, but with Tesla’s competitiveness.

Norway Remains the Sole Bright Spot Norway stood out as the only major exception. In December, Tesla recorded 5,679 new registrations, marking an almost 90% year-over-year increase. This result aligns with Norway’s broader market reality, where 96% of all new vehicles sold in 2025 were fully electric, creating a uniquely favorable environment for Tesla.

European Buyers Turn Away — Musk’s Politics Matter Falling sales cannot be explained solely by pricing pressure or intensifying competition from European and Chinese automakers. A significant factor has been the public behavior of Elon Musk himself. In Germany and the United Kingdom, Tesla faced customer backlash after Musk openly expressed support for far-right political figures. These statements triggered negative public reactions and weakened brand loyalty, prompting some potential buyers to consider alternative manufacturers.

Full Self-Driving Strategy Runs Into Regulatory Reality Despite the setback, Musk has not changed course. He continues to position Tesla’s Full Self-Driving (FSD) system as a future growth engine for Europe. However, a major obstacle remains: FSD is not currently legal in the European Union. European regulators have yet to approve the system, placing Tesla in direct conflict with the very authorities whose approval it needs. A central role in this process is held by RDW, the Dutch agency responsible for vehicle type approval across the EU. Tesla claimed on Musk’s social media platform X that RDW was the “primary pathway” to FSD approval and had allegedly committed to granting Dutch national approval by February 2026. That claim was quickly challenged. The following day, RDW publicly stated that Tesla’s assertion was inaccurate.

“We do not share details about ongoing applications from manufacturers,” the agency said, adding that while both parties recognize the effort required to reach a decision by February, there is no guarantee the timeline will be met.

Tesla Pushes, Regulators Push Back Tensions escalated further during Tesla’s annual shareholder meeting earlier this month, when Musk told investors he would welcome pressure from European customers on regulators to approve FSD. Shortly afterward, Tesla quietly updated its website with new FSD safety statistics. Critics quickly questioned the methodology, calling the data misleading and poorly constructed. Tesla’s European team then shared a link to RDW’s contact page, encouraging supporters to thank the agency for the supposed approval. Regulators reacted sharply. RDW published a notice asking the public not to contact the agency, stating that such messages unnecessarily burden customer service and have no impact on regulatory decisions.

Outlook Remains Challenging Analysts now expect Tesla to report an 11% year-over-year decline in global deliveries for the fourth quarter. Tesla’s own guidance suggests conditions could be even worse, with the company warning the decline may approach 15%. Europe is increasingly emerging as one of Tesla’s weakest regions—at a time when competition is intensifying, regulations remain strict, and the brand is facing both technological hurdles and growing reputational challenges.

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