Finance
Tesla struggles to course correct from sales skid
Published by Global Banking and Finance Review
Posted on November 26, 2025
5 min readLast updated: January 20, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on November 26, 2025
5 min readLast updated: January 20, 2026
Tesla faces declining sales in Europe, China, and the US, with increased competition from VW and Chinese brands. Global deliveries are expected to drop 7% this year.
By Nick Carey and Abhirup Roy
(Reuters) -Tesla CEO Elon Musk has spent much of this year focused on the carmaker’s robotics pursuits and winning shareholder approval for his freshly minted $1 trillion pay package. In the meantime, the outlook for Tesla's main business – selling cars – is darkening.
Tesla faces sales pressure in the world’s three biggest car markets: Europe, China and the United States. The electric-vehicle maker's sales fell 48.5% across Europe in October versus the same month last year, according to data released by the European Automobile Manufacturers' Association on Tuesday. For the year, its sales are down about 30% in the region, while industrywide EV sales jumped 26%.
Tesla's global vehicle deliveries are expected to decline 7% this year, according to Visible Alpha, after a 1% drop in 2024. That is despite record third-quarter deliveries, which were juiced by American car buyers racing to beat the September 30 expiration of an EV tax credit.
The weak European results suggest there will be no quick rebound from the sales turmoil that began late last year, after Musk publicly praised far-right figures, setting off protests across the region. Musk has gone relatively quiet on politics in recent months – but Tesla’s European business has not recovered, signaling more fundamental problems.
As recently as 2023, Tesla’s Model Y SUV was the world’s top-selling car, gas or electric. But Tesla has slid down the sales charts, as rivals have introduced a broad array of improved EVs – often at lower prices – while Tesla’s narrow lineup of models has grown stale, analysts say.
Tesla did not respond to requests for comment.
Late last year, Musk told shareholders he expected vehicle sales to grow 20-30% in 2025. In January, the company said it expected a return to growth, without offering an estimate, before pulling that guidance in the following quarter. In October, Tesla said any growth would depend on macroeconomic factors and how quickly it could add autonomy to its cars and ramp up factory production.
LAPPED BY VW
Tesla’s troubles are most acute in Europe, where more than a dozen electric models sell for under $30,000, with more on the way. A wave of Chinese brands is entering Europe with head-turning designs and broader choice, from EVs to petrol cars and hybrids.
Analysts interviewed by Reuters do not see a quick fix for Tesla in Europe, where it offers just two mass-market models: the Model 3 sedan and Model Y. Tesla recently introduced a stripped-down, lower-priced version of the Model Y to boost sales.
Meanwhile, EV models from other manufacturers are proliferating. In the United Kingdom, more than 150 electric models are on offer from an array of brands, including many new Chinese competitors. At least 50 new electric models are due out next year, according to EV-buying advice site .
"Out of those 50, none are Teslas," said Electrifying.com CEO Ginny Buckley.
Across Europe, China's BYD sold 17,470 cars in October, more than double Tesla’s sales. Meanwhile, in a stark sign of Tesla’s fading dominance in Europe’s EV market, Germany's Volkswagen posted an EV sales rise of 78.2% through September this year to 522,600 units, triple Tesla’s sales.
VW's EV efforts sputtered for years despite a wholehearted embrace of the technology following its 2017 diesel emissions cheating scandal. It once lagged Tesla so badly that VW’s former CEO openly fretted about the risk posed by Musk’s company.
"The problem for Elon Musk is not just his own cars and the Chinese carmakers," said Ferdinand Dudenhoeffer, head of the CAR think tank at the University of Duisburg-Essen. "The problem for Elon Musk is also that the Europeans have caught up."
CHINA SALES RETREAT; A BLEAK U.S. OUTLOOK
In China, Tesla’s sales and market share also are declining, although not as steeply as in Europe. Tesla deliveries in China fell to a three-year low in October, dropping 35.8%. For the year, Tesla’s sales in China were down 8.4% through October.
Tesla faces a slew of rejuvenated Chinese brands, such as Chery, along with newcomers including Xiaomi, whose YU7 has quickly emerged as a Model Y rival since its launch in June.
In the U.S., Tesla sales surged 18% in September, research firm Motor Intelligence estimated, boosted by a last-minute rush from car shoppers trying to beat the September 30 expiration of a $7,500 tax credit. That trend reversed in October, with a 24% drop. Auto executives expect the EV market to remain cold.
Tesla could benefit as several legacy automakers dial back EV models and factory investments, including General Motors, Ford and Honda. Also, the recent launch of new, cheaper variants of the Model Y and Model 3, priced around $5,000 lower, could help bolster its market share, analysts have said.
Some analysts have said Tesla needs a new vehicle to revive sales. But there is little evidence of a new model for human drivers in the pipeline, as Musk pivots his focus to self-driving robotaxis and humanoid robots.
Musk’s new pay package, however, does not require a big surge in sales growth. The CEO can unlock a multibillion-dollar award if Tesla averages 1.2 million vehicles annually over the next decade, along with share appreciation. That is about a half-million fewer than the company sold in 2024.
(Reporting by Nick Carey in London and Abhirup Roy in San Francisco; Additional reporting by Rachel More in Berlin and Qiaoyi Li; Editing by Mike Colias and Matthew Lewis)
An electric vehicle (EV) is a type of vehicle that is powered entirely or partially by electricity, using one or more electric motors for propulsion.
Market share refers to the percentage of an industry's sales that a particular company controls. It is a measure of a company's competitiveness in the market.
Consumer perception is how consumers view and interpret a brand or product based on their experiences, beliefs, and marketing communications.
Sales pressure refers to the challenges and difficulties a company faces in achieving its sales targets, often due to competition, market conditions, or consumer demand.
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