Tesla EVs still top the sales charts in Europe, but its market share has shrunk

The Tesla Model Y and the Model 3 remain the best selling electric vehicles in Europe, but the company’s share of a surging EV market in 2025 has shrunk below 10 per cent for the time in five years, and it has been knocked off its perch as best selling EV brand.

New data released by Jato Dynamics show that overall car sales in Europe are falling, down 2.6 per cent in February, but EVs sales are booming – jumping 26 per cent in February to 164,000. In the first two months of the year, EV sales have leaped 312 per cent in an overall softer market, and sold a record 329,700 units, or a total market share of 17 per cent.

The data tallies figures from across the EU, plus Norway, the UK and Switzerland.

The story is not so good for Tesla, which suffered a 44 per cent slump in sales in February, and ceded top place to Volkswagen as the best selling EV brand, even though the Model Y and the Model 3 retained their top two spots. (VW has numerous EVs on offer, and its ID.4, ID.7, and ID.3 fill 3rd, 5th and 6th spots on the individual model table.

Jato Dynamics global analyst Felipe Munoz says Tesla is being affected by the response to Elon Musk’s politics, and the changeover to the new Model Y.

“Tesla is experiencing a period of immense change,” he said.

“In addition to Elon Musk’s increasingly active role in politics and the increased competition it is facing within the EV market, the brand is phasing out the existing version the Model Y – its best-selling vehicle – in anticipation of the introduction of a new refreshed version.

“During this process, brands often experience a drop in sales before they return to normal levels, once the updated model becomes widely available. Brands like Tesla, which have a relatively limited model lineup, are particularly vulnerable to registration declines when undertaking a model changeover.”

Munoz noted that registrations of the Model Y fell by 56 per cent to 8,800 units in February, while registrations of the Model 3 fell by 14 per cent to 6,800 units.

“The difference in volume drops between these two vehicles suggests that the decline in the brand’s overall sales is more firmly rooted in the Model Y changeover than Musk’s political activity,” he said. ”

However, it will be interesting to see to what extent demand rebounds once the new Model Y hits markets across the region.” That is unlikely to happen until May.

It should be noted that in Australia, the Model Y has suffered a 78 per cent slump in sales so far this year, while the Model Y is down 44 per cent.

It remains to be seen to what extend the brand rebounds with the release of the new Model Y, particularly in key markets such as Germany, Norway and Canada, where the pushback is strongest against Musk’s political statements. The refreshed Model Y sales are not likely to be seen until May.

Jato Dynamics says the slump in Tesla sales has opened up opportunities for Chinese owned car brands, which have outpaced Tesla for the first time. These include the likes of Volvo, BYD and Polestar.

Volvo recorded a 30 per cent drop in BEV registrations, but both BYD and Polestar made substantial gains, with increases of 94% and 84% respectively. Xpeng also performed well with more than 1,000 units, closely followed by Leapmotor with almost 900 units.

Renault was another big mover in the EV market, nearly doubling sales in February to 9,400 – led by the Renault 5. VW more than doubled sales, while others also performed well, including Audi (+67%), Kia (+56%), Skoda (+63%), Citroen (+190%), Cupra (+179%), Mini (+804%), and Ford (+146%).

Tesla, Volvo, MG, Fiat, Jeep and Smart all recorded declines.

Tesla shares, which had slumped sharply in recent weeks – largely as a result of the fall in sales across the globe and the pushback against Musk – jumped 12 per cent in overnight trade to $US278 a share. That’s off the recent lows of $US222 a share, but well below the December peak of $US488 a share.