Tesla is facing mounting pressure as sales decline sharply in its three most important markets — Europe, China and the United States — underscoring growing challenges for the world’s most recognizable EV brand.
According to new data from the European Automobile Manufacturers’ Association, Tesla’s sales in Europe fell 48.5% in October compared to the same month last year. Overall, the company’s sales in the region are down around 30% so far this year, even as industrywide EV sales jumped 26%, News.Az reports, citing Reuters.
Meanwhile, CEO Elon Musk has spent much of 2025 focused on robotics projects and securing shareholder support for his $1 trillion pay package, drawing attention away from Tesla’s core business. Analysts say the company’s aging model lineup and stiff competition are now exposing deeper weaknesses.
Tesla’s global vehicle deliveries are forecast to decline 7% this year, following a 1% decrease in 2024, according to Visible Alpha. This is despite record third-quarter deliveries, driven by Americans rushing to secure EV tax credits before their September 30 expiration.
The weak European performance signals that the sales slump — which began late last year after Musk’s public praise of far-right figures triggered regional backlash — is far from over.
Just two years ago, Tesla’s Model Y was the world’s best-selling car. Today, the company is losing ground as competitors release newer, cheaper and more diverse EVs.
In Europe, Tesla sells only two mass-market models — the Model 3 and Model Y — while rivals continue to expand their offerings. More than 150 electric models are now available in the UK alone, with 50 more launching next year, none of them from Tesla.
Chinese brands are gaining momentum. BYD sold 17,470 cars in Europe in October, more than double Tesla’s sales. Volkswagen, once lagging behind, has also surged ahead with a 78% rise in EV sales through September, reaching 522,600 units — triple Tesla’s European sales.
“The problem for Elon Musk is that the Europeans have caught up,” said Ferdinand Dudenhoeffer of the CAR think tank.
In China, Tesla’s largest market outside the U.S., sales dropped 35.8% in October to a three-year low. For the year, sales are down 8.4%.
Chinese competitors — including Chery and newcomer Xiaomi with its quickly popular YU7 model — continue to eat into Tesla’s market share with fresh designs and competitive pricing.
Tesla enjoyed an 18% surge in U.S. sales in September thanks to buyers racing to claim the $7,500 EV tax credit before it expired. But that momentum reversed in October, with sales dropping 24%. Auto executives say the broader U.S. EV market remains sluggish.
However, Tesla could benefit from rivals slowing down their own EV plans. Ford, GM and Honda have all delayed new EV launches or scaled back investments. Tesla has also introduced cheaper variants of the Model Y and Model 3, lowering prices by around $5,000.
Many analysts believe Tesla urgently needs a new vehicle to revive sales. Yet Musk’s attention has shifted toward robotaxis and humanoid robots rather than traditional car development.
Notably, his new compensation package does not require rapid sales growth. Musk can still unlock multibillion-dollar rewards if Tesla averages 1.2 million vehicles per year over the next decade — roughly half a million fewer than Tesla sold in 2024.