EV maker Tesla (NASDAQ: TSLA) has continued its recession in the European market for five consecutive months and six months in Sweden and Denmark. The Texas-based company’s negative performance could be highlighted by market share and competition from rivals who have taken over CEO Elon Musk’s political affiliation.
According to data from the European Manufacturers Association (ACEA), Tesla Registration, a measure of sales in Europe, in May, marks a 27.9% decline compared to the previous year. Meanwhile, total EV registrations for the region, including the UK, rose 25%, while overall vehicle registrations fell 0.6%.
However, Tesla performed better in May than in April. At that time, sales fell by a whopping 49% year-on-year. The company’s outlook was supported by the launch of the updated Model Y, but total sales in Europe from May 2024 to May 2025 fell 37.1% to 75,916 units.
It has been suggested that the slump could be extended to seven months as Tesla sales declines have been declining for six consecutive months in Denmark and Sweden
In Sweden and Denmark, Tesla sales fell 64.4% and 61.6% year-on-year respectively. The revised Model Y also failed to stop the downfall as sales of the most affordable models in the automaker’s lineup fell by 31.2% compared to 1,155 cars from 2024.
Automotive research firm Schmidt Automotive reported that Tesla lost six years-over-year in its quarterly new registration (sales) volume in Western Europe, particularly Scandinavian countries, and is expected to have negative sales for the seventh consecutive month since June.
In an email sent to Reuters, company analyst Matthias Schmidt wrote that when automakers release new models updates, it is a “extension strategy” of the product’s lifecycle, giving the company a short-term bounce. He said Tesla’s market share continues to shrink significantly while demand for European markets for BEVs (battery electric vehicles) is increasing.
Andy Leyland, co-founder of supply chain expert SC Insights, said in smaller European markets Tesla sells in hundreds or fewer thousands. He added that only consumers can point out the reasons for the decline in sales. He added that this could be due to one of two reasons: Elon Musk’s support for President Donald Trump or product-related issues.
Tesla’s latest European monthly car registration amount coincided with the famous fallout update between Musk and Trump over the “Big Beautiful Building.”
Musk, who worked closely with the Trump administration as part of the Department of Government Efficiency (DOGE) to identify government spending, is strongly opposed to rising federal budgets.
Analysts suggest Musk’s setback against Trump could be a strategic move to attenuate the damage that has been incurred on Tesla, but it’s too late.
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Tesla sales across Europe have dropped significantly, with only Norway posting positive numbers
The French PFA National Auto Lobby report showed that new Tesla registrations in the country fell 67% in May to 721 units, falling 67%, with overall sales falling 47% since the start of the year. Mobility Sweden reported that new registrations for 55.7% YTD in May have been reduced to 503 units. Meanwhile, sales in Denmark fell 30.5%, in the Netherlands 36%, in Spain 19% and in Portugal 68%. Norway was the only EU member state that saw Tesla sales increase in May.
Automakers do not report regional or monthly sales, and have significantly increased production and delivery reports for the next quarter. The $1 trillion company, headquartered in Austin, Texas, is expected to release its second-quarter results on July 22nd.
EV Giant’s TSLA stock plummeted 21.3% on a YTD basis. It was well below the counterpart of the S&P 500 Index (SPX), earning a 5.5% profit during that time. Despite being immersed by 3.1% in the same period, the consumer discretionary selection sector SPDR fund (XLY) also outperformed Tesla.
However, TSLA prices rose 5.4% in the first trading session after the first quarter revenue report was released in April, giving investors a faint hope.
Musk faced serious backlash from clients in the US and Europe as he joined the Trump administration as a special adviser to the president. This had a major impact on Tesla’s revenue, down 19.6% year-on-year to $14 billion.
Investors look forward to Tesla’s second quarter earnings report
However, electric vehicles are not Tesla’s only business area. The company also designs, develops, manufactures, leasss and sells energy generation and storage systems. While car sales were declining, its energy storage and generation, and service revenues generated markedly, partially offsetting EV losses. However, Tesla’s total revenue for the first quarter fell 9.2% year-on-year to $19.3 billion, while net profit to shareholders plummeted to 70.6% in the first three months of 2025 to $409 million.
Investors remain optimistic about the stocks after Musk unveiled Tesla’s upcoming Cybercab Robotaxis production timeline. Analysts are also cautious about stock outlook, with TSLA still maintaining an overall “hold” rating for the time being. Of the 41 analysts who covered inventory, 14 graded “strong shopping”, 2 graded “medium purchases”, 15 won “holds” and 10 gave a “strong sell” rating.
At the time of writing, Tesla (TSLA) is trading at $317.66, a 1.84% decrease over the past 24 hours.
