Data from the ACEA (the European Automobile Manufacturers’ Association) report indicates a sharp drop in Tesla's sales in Europe in April 2025. Across Europe, Tesla recorded an approximate 49% year-over-year (YoY) sales decrease, while in the European Union alone, this figure exceeded -52% YoY.
Tesla's sales performance in Europe is primarily attributed to the company's own issues and the sentiment towards it, particularly in light of Trump's policies, which are raising doubts and impacting sentiment towards the company due to Elon Musk's close cooperation with the US President.
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Create account Try a demo Download mobile app Download mobile appThe electric vehicle sector itself in Europe is showing healthy growth dynamics. In April alone, the number of newly registered electric cars increased by 27.8% YoY across Europe (in the EU, the result was even better at 34.1%).
A challenge for the company in terms of market structure may be the increasing share of hybrid cars. Although the growth dynamic in Europe was slightly lower than for electric cars (+17% YoY), it's worth noting that hybrid cars were experiencing a higher base effect. As a result, the overall market share of hybrid cars rose to 34.6% (compared to 29% a year earlier), thus surpassing internal combustion engine cars, whose share fell to 28% (from 36% a year earlier).
In April, hybrid cars were the largest component of the market. Their popularity may weaken the potential of the electric car market due to fulfilling similar consumer needs, including those related to environmental protection. Source: ACEA
For Tesla, data points to persisting challenges in the perception of the American brand by European customers. Trump's announced retaliatory tariffs, which would significantly impact international trade, may have affected consumer sentiment. An additional factor is Elon Musk's image problems, which also deter customers from purchasing the cars. Among less social reasons for the sales decline, one can look for a lack of innovation in the products offered. The absence of a new line of Tesla models may be leading customers to switch to other manufacturers. Although the company released a refreshed Model Y SUV, current data indicates that customers expect something more.
Tesla is still valued primarily on hopes regarding the innovativeness of future technologies, but for now, the company remains an electric car manufacturer, which constitutes its core business. If the erosion of sales continues, the company may not be able to sustain high multiples until its major technological development plans are realized.
Despite the disappointing data, Tesla is seeing gains in pre-market trading. This is primarily due to yesterday's US stock market closure and the inability of the market to price in the impact of the extension of the deadline for potential 50% tariffs between the US and the EU. Source: xStation
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