Elon Musk's politics hit Tesla sales in Europe's biggest car markets

(Reuters) -Tesla's new car registrations in Britain and Germany, Europe's biggest auto markets, more than halved in July from a year earlier, as CEO Elon Musk's political views deter buyers and the company grapples with regulatory challenges.

Competition has also increased and sales of EVs made by China's BYD rose nearly five-fold in Germany and over four-fold in Britain in July, official industry data showed on Tuesday.

Data last week showed a revamp of Tesla's signature Model Y had failed to reverse a fall in sales in major European markets. A Reuters report on Monday found enthusiasm for the brand has plunged since Musk endorsed Donald Trump in the run-up to his re-election last year.

Tesla's July registrations - a proxy for sales - dropped by nearly 60% to 987 units in Britain and by over 55% to 1,110 in Germany, official industry data showed on Tuesday, taking the brand's decline in the month to 45% in 10 European markets that together accounted for over 80% of Tesla's first-half sales in the European Union, the UK and the European Free Trade Association.

"That markets shrug at poor sales numbers suggests the company's fortunes rest on their ability to bring forward workable self-driving vehicles", said Ben Nelmes, founder of EV data analysis firm New AutoMotive.

Since last year, Musk has shifted Tesla's focus to developing self-driving technology from new, affordable models for human drivers.

Overall, the total number of newly registered cars in Germany rose by 11.1% to 264,802 vehicles, with sales of electric vehicles up 58% in July to 48,614 units, the German road traffic agency KBA said.

The agency also said the sales volumes of Chinese electric vehicle manufacturer BYD jumped almost fivefold in July to 1,126 units and more than fivefold to 7,449 units since the beginning of the year.

New car registrations in Britain fell about 5% year-on-year in July to 140,154 units, with growth in battery electric vehicle sales moderating to 9.1% in the month, figures from industry body Society of Motor Manufacturers and Traders showed.

BYD sales in the country were up over 300% to 3,184 cars sold in the month.

Battery electric vehicles are now projected to account for 23.8% of new registrations in 2025, slightly up from the society's previous forecast of 23.5%.

"July's dip shows yet again the new car market’s sensitivity to external factors, and the pressing need for consumer certainty," SMMT chief executive Mike Hawes said in a statement.

The new electric car grant offers financial help to encourage people to buy BEVs. However, it's still unclear which models will be eligible, so some buyers are waiting, the SMMT said. 

(Reporting by Shanima A and Yadarisa Shabong in Bengaluru, Amir Orusov and Alessandro Parodi in Gdansk; Editing by Tasim Zahid, Mrigank Dhaniwala and Barbara Lewis)