Tesla sales drop again around Europe despite Model Y revamp

By Alessandro Parodi

(Reuters) -Registrations of new Tesla cars in several key European markets fell in July, despite a revamp to its signature Model Y, as the EV maker struggles with a backlash to CEO Elon Musk's political views, regulatory challenges and rising competition.

Tesla's aging lineup is facing a wave of low-cost EV rivals, especially from China. It is rolling out a revamped Model Y and starting to produce a new, cheaper model, but production of that will only ramp up next quarter, later than initially expected.

The brand's registrations - a close proxy of sales - fell 86% year-on-year in July to 163 cars in Sweden, 52% to 336 cars in Denmark, 27% to 1,307 in France and 62% to 443 in the Netherlands, official industry data showed, marking a seventh straight monthly drop in all of those countries.

Tesla sales dropped by over a third in Europe in the first six months of the year.

Norway and Spain bucked the trend, with Tesla's registrations up 83% and 27% to 838 cars and 702 cars, respectively.

Spain recorded a 155% jump in total sales of electrified cars - either battery electric or plug-in hybrid. Tesla's Chinese competitor BYD sold 2,158 cars in Spain in July, almost eight times more than in July 2024.

With no more affordable-end vehicles on the horizon until the last three months of the year and the upcoming end of a $7,500 U.S. tax break for EV buyers, Musk acknowledged in July that Tesla could have "a few rough quarters".

He said tough automated driving regulations in Europe made it harder to sell the Model Y in some countries, as the vehicle's optional supervised self-driving is "a huge selling point".

"Our sales in Europe, we think will improve significantly once we are able to give customers the same experience that they have in the U.S.," he told analysts.

Tesla began selling a long-range four-wheel version of the revamped Model Y in Europe in March 2025, while sales of the two rear-wheel drive variants began in May.

Model Y registrations in Sweden and Denmark fell by 88% and 49% respectively in July, while they jumped more than fourfold to 715 cars in Norway.

Norway, where almost all new cars sold are fully-electric and where Tesla has been the best-selling brand since 2021, has seen a surge in orders for the model since May after the automaker launched 0% interest loans in some Nordic countries to drum up demand.

Tesla launched in June a trial robotaxi service in Austin, Texas, using about a dozen Model Y SUVs controlled by its autonomous-driving software. But the roll-out of its self-driving features elsewhere in the U.S. is bogged down because it hasn't received the required permits.

Overall car sales were up 20% in Denmark, 6% in Sweden, 48% in Norway, 17% in Spain and 9% in the Netherlands, while they slid 8% in France in July, industry data showed.

Other European countries are expected to release July car sales data later on Friday.

European automakers Volkswagen, Mercedes-Benz, Stellantis, Renault and BMW have published downbeat second-quarter results, warning of pressure from U.S. import tariffs and falling demand.

(Reporting by Alessandro Parodi, Camille Raynaud, Louise Rasmussen, Marie Mannes, Terje Solsvik, Inti Landauro, Javi West Larrañaga and Bart Meijer; Editing by Himani Sarkar and Mark Potter)