Tesla (TSLA) is facing fresh concerns as its European sales continue to slide. The company’s stock dropped more than 5% in early trading after May data showed a fifth consecutive monthly decline in EV registrations across Europe — even as rival BYD reportedly scales back production as well.
According to the European Automobile Manufacturers Association (ACEA), Tesla EV registrations in Europe dropped 27.9% year-over-year in May to 13,863 vehicles. In contrast, EV registrations across the broader European region — including the UK and European Free Trade Association — rose 25% during the same month. Overall vehicle registrations dipped 0.6%.
This marks the fifth month in a row of falling Tesla sales in Europe, though the decline in May was less severe than April’s 49% plunge.
While wider availability of the Model Y may have offered some support, Tesla’s May sales still fell compared to April. For the year to date through May, Tesla’s European sales are down 37.1% to 75,196 units.
Reuters compiled concerning country-level data. In France, the PFA national auto lobby reported a 67% drop in Tesla registrations in May to 721 units, with sales down 47% year to date. In Sweden, Tesla’s EV registrations fell 53.7% to 503 units from the same period last year.
Reuters reported Tesla registrations fell 30.5% in Denmark, 36% in the Netherlands, 19% in Spain, and a massive 68% in Portugal. Norway was the only territory in Europe to show sales gains for May.
The decline in demand follows CEO Elon Musk’s involvement in U.S. political controversies, which may have soured some European consumers. “Demand weakness in the EU came after CEO Elon Musk’s foray into Trump administration politics, causing some Tesla owners to become disillusioned with him, specifically by his right-leaning tendencies, support of right-wing leaders in Europe, and leadership of the Department of Government Efficiency (DOGE) in the US.”
While some analysts welcomed Musk’s decision to step back from political activity, the long-term impact on Tesla’s brand remains uncertain. “Musk’s recent return to his businesses from politics is seen as a welcome move, per analysts, including Wedbush’s Dan Ives, but many wonder if Musk’s escapades will permanently damage Tesla’s reputation.” Additionally, “Musk’s recent attacks on President Trump now have both liberals and conservatives upset with the mercurial CEO.”
As Tesla does not disclose regional or monthly sales, investors are looking ahead to the company’s second-quarter production and delivery report, which is expected next week.
In a recent investor note, Wells Fargo analyst Colin Langan warned of weakening fundamentals. “Tesla’s fundamentals are coming in worse than expected,” he wrote, forecasting second-quarter deliveries down 21% year-over-year. The bank expects Tesla to deliver 343,000 vehicles in Q2, about 17% below the Wall Street consensus of 411,000. In Q1, Tesla delivered 336,681 units, missing the Bloomberg consensus estimate of 390,342 — its worst quarter since Q2 2022.
While European EV sales remain on an upward trend, the pace appears to be slowing in China — the world’s largest EV market. Reuters reported that BYD, the globe’s leading EV and plug-in automaker by volume, has recently reduced factory shifts and postponed expansion plans.
“Reuters reports that China’s BYD (1211.HK), the biggest producer of EVs and plug-ins by volume, has slowed its production and expansion in recent months by ‘reducing shifts at some factories in China and delaying plans to add new production lines.'” Sources told Reuters that BYD cut night shifts and reduced output by at least a third at four of its seven plants.
BYD, which sold 4.27 million vehicles last year globally, is targeting 5.5 million units for 2025, Reuters added.
Adding to Tesla’s challenges, a top executive close to Musk is also departing. Tesla executive and longtime Elon Musk confidant Omead Afshar has left the company, according to three sources cited by Reuters.
Afshar, who had overseen sales and manufacturing in Europe and North America, was a key figure in Tesla’s leadership since joining in 2017 and played a critical role in the development of the Texas Gigafactory.
The sources, who declined to be named, had no details on the reasons behind his departure. Afshar’s social media profiles as of Wednesday still listed Tesla as his current employer.
“Afshar departed amid slumping demand in Europe and North America for Tesla.”
Tesla stock was down over 5% in early trade.
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