Model Y upgrade difficult to save the situation! Tesla's European sales have fallen for seven consecutive months

According to Zhitong Finance APP, despite significant improvements to the iconic global model Model Y, electric vehicle leader Tesla (TSLA.US) still experienced a substantial decline in new car registrations in several key European markets in July. The American electric vehicle manufacturer is struggling to cope with CEO Elon Musk's aggressive political stance in Europe, regulatory challenges regarding autonomous driving, and increasingly fierce competition in the electric vehicle market.

Tesla's aging electric vehicle product lineup is facing a wave of low-priced electric vehicle competitors, particularly from a new generation of electric vehicle rivals from China. The company is launching a revamped Model Y and has begun production of a cheaper new model, but the output of this model will not significantly increase until the next quarter, later than initially expected.

Official industry registration data in Europe shows that Tesla's brand registrations (which are closely related to sales) continue to shrink in Europe, with a year-on-year plunge in July: a drop of 86% to 163 units in the Swedish market, a 52% decrease to 336 units in Denmark, a 27% decline to 1,307 units in France, and a 62% drop to 443 units in the Netherlands. These countries, which have long had the strongest demand for cars in Europe, have recorded a decline in Tesla electric vehicle registrations for seven consecutive months.

In the first six months of this year, Tesla's sales in the European market fell by more than one-third year-on-year.

However, the trends in electric vehicle registrations in Norway and Spain are contrary to those in the aforementioned countries, with Tesla registrations increasing by 83% and 27% in July, reaching 838 units and 702 units, respectively.

In Spain, total sales of electrified vehicles (including pure electric or plug-in hybrid systems) surged by 155%. Additionally, one of Tesla's strongest competitors in China, BYD, sold as many as 2,158 units in Spain, nearly eight times that of July 2024.

The multi-bar chart shows the changes in Tesla's pure electric vehicle sales in certain European markets in July and the first seven months of this year, as well as Tesla's pure electric vehicle sales and market share in the EU from January 2024 to June 2025.

Before the last three months of this year, it is expected that Tesla will not launch more affordable entry-level electric vehicle models, and the $7,500 tax credit for car purchases in the U.S. is about to expire. Musk admitted in July that Tesla may face "a few very tough quarters."

He stated that the exceptionally strict autonomous driving regulations imposed by European regulators make it more difficult for Model Y to achieve sales growth in some countries and promote the subscription of the FSD (Full Self-Driving) service. In the European market, the optional supervised autonomous driving system for the Tesla Model Y is "a major selling point." "We believe that once we can provide European market customers with a driving experience almost identical to that of the U.S. market, our sales in Europe will significantly improve," Musk told analysts during the earnings call.

Tesla will launch the updated Model Y Long Range All-Wheel Drive version in Europe in March 2025, with two rear-wheel drive versions starting sales in May.

Statistics show that in July alone, registrations of the Model Y fell by 88% and 49% in Sweden and Denmark, respectively, but surged more than fourfold to 715 units in Norway.

In Norway, where nearly all new cars are fully electric and Tesla has been the best-selling brand since 2021, the introduction of 0% interest loans in May has stimulated a surge in orders for the model.

In June, Tesla launched a pilot autonomous Robotaxi service in Austin, Texas, using about ten Model Y SUVs controlled by its autonomous driving software. However, the rollout of its autonomous driving features in other parts of the U.S. has continued to face obstacles due to the lack of necessary regulatory approvals.

Industry statistics indicate that in July, overall car sales in Denmark increased by 20% year-on-year, Sweden by 6%, Norway by 48%, Spain by 17%, the Netherlands by 9%, while the French market declined by 8%.

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

European automakers Volkswagen, Mercedes-Benz, Stellantis, Renault, and BMW have all reported second-quarter results that were weaker than market expectations, warning of pressure from U.S. import tariffs and a continued slowdown in demand