Tesla Europe sales sink 40% in July as rival BYD pulls ahead

Investing.com-- Tesla Inc’s (NASDAQ:TSLA) Europe sales and market share fell sharply in July, data from the European Automobile Manufacturers’ Association (ACEA) showed on Thursday, even as broader electric vehicle sales in the region continued to increase.

Tesla’s sales largely lagged those of Chinese rival BYD Co (HK:1211), who was included in the monthly sales data for the first time. The latter also seized a greater market share than Tesla. 

Tesla’s total new car registrations in the European Union, the Europe Free Trade Association, and in the UK, slid 40.2% year-on-year to 8,837 units, ACEA data showed. The ACEA is a group of 15 European automakers that acts as the main lobbying and standards group for the bloc’s automobile industry. 

Tesla’s market share in the region shrank further to 0.8% from 1.4% y-o-y, while its January-July sales declined by 33.6% from the same period last year. 

The drop came even as total battery EV sales in Europe surged 33.6% in July. The sector now represents about 15.6% of the European car market, behind a 28.3% share held by petrol vehicles and a 34.7% share held by hybrid EVs. 

July’s figures showed Tesla clocking another dismal month of sales in the region, as the company grapples with increasing competition from local and Chinese manufacturers. 

Chinese rival BYD outpaced Tesla in Europe by selling 13,503 units in July, while also commanding a greater market share at 1.2%. The company’s hybrid vehicles make it more attractive to cost-conscious customers, while high European import duties against China also did little to deter consumer interest. 

Tesla’s updated Model Y, released earlier this year, largely failed to bolster sales, while rival offerings from European automakers, who largely jumped on the EV bandwagon in recent years, also provided increased competition. 

Tesla is struggling to improve its brand image, which was seemingly tarnished this year by CEO Elon Musk’s endorsement of U.S. President Donald Trump, as well as his associations with a German far right party. Tesla was slapped with consumer boycotts across Europe and the United States.

Musk, speaking during Tesla’s second-quarter earnings in late-July, said the EV maker faces a “few rough quarters,” with an end to U.S. EV tax credits also heralding more trouble. 

Still, Musk has touted artificial intelligence, autonomous driving, and robotics as the next big growth drivers for Tesla.