Tesla (NASDAQ:TSLA) experienced a significant 27.9% drop in new vehicle sales across Europe in May compared to the previous year, even as fully electric vehicle sales surged 27.2% in the region.
The American electric carmaker’s market share in Europe shrank to 1.2% in May from 1.8% a year earlier, marking the fifth straight month of declining sales. This decline coincides with growing consumer interest in more affordable Chinese electric vehicles and some buyers’ dissatisfaction with CEO Elon Musk’s political statements.
According to the European Automobile Manufacturers Association, overall vehicle sales in Europe rose 1.9% to 1.11 million units in May, bouncing back from a slight 0.3% dip in April.
Despite European Union tariffs on Chinese-made electric cars, Chinese manufacturers continued to strengthen their foothold, selling 65,808 cars in May and doubling their market share to 5.9%, based on Jato Dynamics data. Notably, BYD (USOTC:BYDDY) nearly matched Tesla’s registrations in May, having already surpassed Tesla in April.
Tesla’s updated Model Y has yet to reverse the declining trend as both established European brands and Chinese competitors rapidly launch new electric models amid escalating trade tensions.
Among major automakers, China’s state-owned SAIC Motor saw registrations rise by 22.5%, Germany’s BMW (TG:BMW) grew 5.6%, while Japan’s Mazda saw a 23% drop.
Within the EU, total car sales are down 0.6% so far this year. However, demand for electric vehicles continues to expand, with registrations for battery-electric, plug-in hybrid, and hybrid vehicles increasing 26.1%, 15%, and 19.8%, respectively.
Electrified vehicles made up 58.9% of all passenger car registrations in the EU in May, a notable jump from 48.9% the year prior.
Looking at individual markets, Spain and Germany saw new car sales rise 18.6% and 1.2%, respectively, while France and Italy posted declines of 12.3% and 0.1%. The UK experienced a modest 1.6% increase in registrations.