Tesla recorded a modest rebound in several European markets in September, buoyed by sales of its updated Model Y, but analysts warn the U.S. automaker faces mounting challenges from both European and Chinese competitors amid an ageing product lineup.
According to local industry data released Wednesday, Tesla’s sales rose in France, Denmark, Norway, and Spain, with the Model Y emerging as Denmark’s best-selling vehicle. However, new car registrations fell in Sweden and the Netherlands—the latter marking its ninth consecutive monthly decline.
Despite recent gains, Tesla’s broader European performance remains weak. Between January and August, Tesla’s sales fell 42.9% year-on-year in the European Union and 32.6% across Europe overall, even as the region’s total EV sales jumped 24.8%.
Matthias Schmidt of Schmidt Automotive Research described the September uptick as “a bottoming out of the downward trend rather than any real signs of an expected uplift.” He said an affordable Model Y variant, expected in 2026, could help, but Tesla’s prospects remain “tough in a more competitive market environment.”
Once dominant in Europe, Tesla now faces an influx of new EVs from Volkswagen, BMW, Renault, and Chinese players like BYD, which outsold Tesla in the EU in August for the second time this year.
The automaker’s reputation has also been affected by political backlash against CEO Elon Musk, whose support for Donald Trump’s re-election campaign and European far-right parties has alienated some consumers.
Andy Palmer, chairman of Electric Vehicles UK, said Tesla is still “a big fish, but the pond is now full of serious competitors.” Unless it refreshes its range soon, he warned, “it will keep losing market share.”
Performance varied sharply across Europe in September:
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France: +2.74% year-on-year
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Denmark: +20.5%, with the Model Y leading sales
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Norway: +14.7%, with Model Y and Model 3 ranking top two
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Spain: +3.4%, boosted by a 60% surge in Model Y registrations
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Sweden: –64% year-on-year, though higher than August levels
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Netherlands: –48%
Analyst Andy Leyland of SC Insights said Tesla’s biggest challenge lies ahead: “Chinese automakers are rapidly building distribution networks in Germany, the UK, and France. It will be critical to see whether Tesla can still compete.”