Tesla’s decline across parts of Europe has hardened into a clear pattern: sharp collapses in several northern and western markets, pockets of resilience where the brand remains strong, and a steady transfer of market share to Chinese manufacturers and traditional European automakers. August data show a company that is still a major player on the continent but one whose grip is loosening as rivals seize the momentum.

Across a handful of countries that report monthly registration figures early, Tesla’s new-car registrations plunged dramatically in August. France recorded a near-halving of Tesla registrations even as its overall market grew modestly; Sweden saw one of the steepest drops, with registrations collapsing to a fraction of last year’s levels; and Denmark posted a heavy double-digit decline. Norway, long Tesla’s European stronghold, bucked the wider trend and produced an uptick in Tesla registrations — but even there Chinese brands made big gains, signalling the broader competitive shift.

Northern markets bear the brunt

In markets that were once among Tesla’s most reliable sources of sales growth, the slump is unmistakable. Sweden’s new-vehicle listings for Tesla fell by more than four-fifths in August compared with the same month a year earlier, leaving the electric-car maker a tiny presence in a market that continues to register healthy overall demand for new cars. Denmark, where battery-electric vehicles represent an especially large share of new registrations, also recorded a steep month-on-month drop in Tesla registrations, even as overall demand remained strong.

France — Europe’s second-largest car market — presents a striking contrast: overall registrations increased during the month while Tesla’s fell sharply. That divergence underlines the picture across the continent: demand for electric vehicles is not the problem, but Tesla’s ability to convert a rising EV tide into its own sales is weakening.

Why the slide is happening

Analysts point to a combination of product, pricing, perception and used-car dynamics. On product, Tesla’s line-up in Europe has not grown materially in recent years: the company has leaned heavily on variants of the Model 3 and Model Y while legacy European manufacturers and an influx of Chinese brands have offered a steady pipeline of fresh, often cheaper or better-equipped models aimed directly at the mass market.

Price moves have complicated Tesla’s position. Deep price cuts introduced over recent years to stimulate demand for new cars have had a knock-on effect in the secondhand market. Used Tesla values have fallen markedly in some markets, and large volumes of cheaper, recent-model used Teslas are appearing in dealer inventories. That combination—lower new-car prices and diminished residual values—reduces the perceived investment quality of a Tesla purchase and weakens the brand’s traditional advantage on total cost of ownership for some buyers.

Brand perception has also shifted. High-profile political and public relations controversies involving the company’s chief executive have become a louder part of the conversation in Europe this year. Market research by consumer advice sites and independent analysts has found a growing share of potential buyers saying the CEO’s visibility and statements affect their willingness to buy the brand. For a category where reputation and trust weigh heavily on first-time EV buyers, this erosion of brand neutrality appears to be a material factor.

Supply and timing have also played a role. Tesla has argued that production shifts toward refreshed Model Y variants have temporarily affected available stock, and deliveries of the revised Model Y only began to reach many European markets mid-year. But early returns from those updated models have not universally arrested the downturn: in some countries the refreshed Model Y registered far fewer sales than the older version did a year earlier.

Winners at Tesla’s expense

The beneficiaries of Tesla’s soft patch fall into two broad camps: China’s electric-vehicle exporters and established European volume manufacturers.

Chinese brands, with BYD at the front, are racing into Europe with competitive pricing, a fast cadence of new product introductions and aggressive distribution strategies. In markets where BYD has launched multiple models, it has rapidly grown registrations — in some months tripling its volumes year-on-year — and in at least one northern market it posted a spike in registrations that far outpaced Tesla’s. BYD’s combination of broader model range, strong value propositions and faster local rollouts has made it a visible alternative for buyers who previously might have defaulted to a Tesla.

Traditional automakers are also reclaiming ground. Volkswagen Group, Renault, Hyundai–Kia and the premium German brands have all accelerated EV offerings tailored to European tastes: more compact models, brand-recognisable interiors, and dealer networks that support test drives, maintenance and financing in ways that appeal to mainstream buyers. For many European customers, the familiarity of local brands plus newly competitive EV pricing creates an attractive trade-off against Tesla’s technology-first proposition.

Used-car market dynamics are reshuffling winners as well. Large volumes of low-priced, late-model used Teslas are being snapped up by value-oriented buyers and fleet operators, which is temporarily increasing the visibility of Teslas on the roads but simultaneously eroding margins for new sales. Meanwhile, rival new models that hold their residuals better present an easier financial case to buyers contemplating leasing or financing.

Regional patterns and implications

The rout is most visible in northern Europe’s smaller markets that publish early monthly statistics — Sweden and Denmark among them — and in large western markets like France where Tesla’s registrations tumbled even as the market grew. The UK and Germany — Tesla’s two largest European markets by volume — have shown slumping sales earlier in the year and are expected to reflect similar pressures as full monthly data are released. Norway remains an exception: it still registers meaningful Tesla demand, though it also shows accelerating uptake of Chinese brands.

For Tesla, the immediate implications are twofold. First, losing share in Europe diminishes the company’s global growth story and may pressure pricing and profitability if Tesla responds with deeper discounts or incentives. Second, slower sales in markets where EV adoption is otherwise climbing could alter the competitive landscape: rivals that convert trial and awareness into sales will entrench themselves and make recovery harder for Tesla without new product or strategic shifts.

The next wave of data from Germany and the UK will be closely watched for confirmation that the slump is broad-based across Europe’s largest markets, or whether it remains concentrated in particular segments and countries. Product introductions from both Chinese entrants and legacy automakers will continue at pace, and Tesla’s own inventory, pricing and public messaging choices over the coming months will be important signals of whether the company can halt its slide.

(Adapted from USNews.com)