Tesla sales in Europe have collapsed by one-third this year, data shows, after Elon Musk warned the electric carmaker faced “a few rough quarters” ahead.
According to the figures published on Thursday by the European Automobile Manufacturers’ Association (ACEA), sales of Tesla vehicles in Europe slumped by 33% to 110,000 in the first half of 2025, compared with 165,000 in the first half of 2024.
The data suggests Tesla is still trying to emerge from a sales rut in Europe, even after releasing a refreshed version of the Model Y, its bestselling car. It is not the only carmaker struggling to tempt European customers, with total new car sales across the EU down by 7% in June.
However, Tesla faces specific challenges. Musk, whose shares in the company have made him the world’s richest man, has contributed to the decline by backing Europe’s far-right political parties, and briefly allying himself with Donald Trump, who is deeply unpopular across the continent.
The Tesla chief executive’s alliance with Trump has since blown up spectacularly, while the company has come under pressure in the US from the president’s anti-EV policies.
Sales across Europe – including the EU, UK, Norway and Switzerland – were down for the US carmaker by more than a fifth year on year in June, to 35,000.
Tesla shares fell by 8% at the start of trading on Wall Street on Thursday, after Musk said on Wednesday night that the electric car pioneer “probably could have a few rough quarters” ahead.
Musk linked falling earnings to Trump slashing the incentives available for electric carmakers.
The president’s tax and spending plans include a clampdown on sales of emissions credits by electric vehicle makers to more heavily polluting rivals, which had provided billions of dollars of revenue for Tesla over several years.
Trump’s attitude to Musk has been inconsistent. In a post on Thursday on his Truth Social platform, which is a competitor to Musk’s X, he denied that he was harming Tesla.
“Everyone is stating that I will destroy Elon’s companies by taking away some, if not all, of the large scale subsidies he receives from the US Government. This is not so!” he wrote. “I want Elon, and all businesses within our Country, to THRIVE.”
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The electric vehicle maker said revenues fell by 12% in the second quarter compared with the same period last year, coming in at $22.5bn (£16.6bn); below Wall Street expectations of $22.7bn. Operating income also fell to $900m, a 42% decrease since last year.
The UK has been a rare bright spot for Tesla in Europe, with sales down only 1.3% year on year in the first half of 2025, according to the Society of Motor Manufacturers and Traders, the British industry’s lobby group. Yet the picture in the EU has been bleak: the ACEA data showed Tesla sales were down by 40% year on year in June in the EU, and 44% down in the first half of 2025.
Across all European markets, Tesla’s share of sales has dropped from 2.4% in 2024 to 1.6% in 2025 – although it may regain some ground as sales of the refreshed Model Y pick up across the continent.
Yet rather than improving the products bought by consumers, Musk is pinning much of his hopes on future earnings from driverless taxis run by artificial intelligence. The company has launched a pilot taxi programme in Austin, Texas, and Musk has repeatedly touted it as the company’s main opportunity.
Matt Britzman, an equity analyst at Hargreaves Lansdown, an investment platform, said Tesla’s second-quarter numbers were “objectively poor”.
“The typical playbook for the past few quarters has been declining fundamentals but enough AI hype to keep investors sleeping at night,” he said. “Tesla is in a very small cohort of companies with enough growth potential that investors are, for now at least, willing to look past weakening core financials.”
