Tesla’s July European sales split sharply by market

Tesla’s July European registrations painted an erratic picture: sales rose 86% in France and 52% in Denmark year-on-year, while collapsing 97% in Norway, 81% in Spain, 77% in Italy, 69% in Portugal and 60% in Sweden. The severity of the divergence complicates the sunny recovery narrative built around Tesla’s Q2 results, in which record deliveries beat Wall Street estimates partly on the strength of an apparent European rebound.

Schmidt Automotive’s Matthias Schmidt said in comments seen by Reuters that Tesla appears to be deliberately prioritising markets with the most generous incentives—such as France and Germany—where volumes are most likely to sharply increase during H2. Thus, the weaker markets may reflect reallocated shipments rather than lost demand outright. Meanwhile, SC Insights’ Andy Leyland cautioned against reading too much into Norway’s single-month collapse specifically, noting that such sharp swings usually trace back to shipment timing or a tax change more so than an actual shift in underlying appetite.

It has been a strong year for European electric vehicle adoption, with the market growing a healthy 51% year-on-year in June according to European Automobile Manufacturers’ Association data. The broad improvement of adoption incentives in various countries, including France, Germany and Spain, is a major driver of this.  

Alongside this upswing in demand, Tesla’s own European sales have been recovering more or less proportionately after two consecutive annual declines. This has been aided by factors largely outside of the automaker’s control, like Iran war-induced gasoline price shocks and  improved government incentives. It should be noted that the data is incomplete, with both of Europe’s largest markets, Germany and the UK, due to come in later in the week. 

Certainly, Tesla is barely keeping pace with its most immediate competitors. Separate data from Schmidt Automotive Research shows Chinese brands, from BYD to Xpeng, lifted their combined share of new car sales across 18 Western European countries to a record 10.7% during Q2, up from 5.7% a year earlier. Tesla’s own regional share rose over the same period, from 1.7% to 2.6% even as the collective share of all US-based brands fell to 6.5%. 

BYD, arguably Tesla’s primary competitor, delivered 91,500 units in the second quarter for a 2.8% regional share, surpassing Tesla. It did this while launching two Denza luxury models in April and July, and laying out plans for 3,000 flash-charging stations across the region by March 2027. Leapmotor, one of the most successful Chinese entrants into European markets, deepened its production tie-up with Stellantis in May and is co-developing a model for the Opel marque. Geely also moved in July to acquire a 34% stake in a Ford plant in Spain for €221m (US$257m), part of a wider localisation wave that could soon see Xpeng and BYD acquiring brownfield sites from Volkswagen and Stellantis.

Read against that backdrop, Tesla’s July numbers look less like a broad-based recovery than a company carefully managing where its supply goes. Sharp declines across five markets sitting alongside strong growth in exactly the two countries with the richest incentives points to prioritised shipment allocation rather than a genuine, evenly spread rebound in European demand for the brand.

The comparison also flatters Tesla more than the headline percentages suggest. July’s year-on-year gains are measured against a 2025 performance depressed 28% by subsidy cuts, an ageing lineup and a disruptive Model Y production changeover. Against that low starting point, this year’s percentage swings, in both directions, say less about underlying demand than they appear to. Other issues, such as Chief Executive Elon Musk’s persistent far-right political grandstanding and his association with figures like Donald Trump and the UK’s Tommy Robinson, remain unaddressed.

Ultimately, Tesla defending a 2.6% regional share at the same moment BYD alone captures 2.8% reframes what a “recovery” actually means here. Tesla isn’t reclaiming ground it lost to Chinese entrants, it’s managing a shrinking position within a market those entrants are expanding into considerably faster. No amount of favourable shipment timing to France and Denmark changes that underlying trajectory.