Tesla’s dominance in electric vehicle markets has weakened across Europe and Finland. The US-based company, once the undisputed leader in battery-powered transport, now trails behind several competitors, including China’s BYD.
In Finland, Tesla’s Model Y has lost its title as the most popular electric car. The Volkswagen ID.4 now leads the market, followed by the ID.7 and Škoda Enyaq. Tesla’s fall in rankings follows similar trends across the continent.
In April, European registrations showed BYD outselling Tesla for the first time. According to data from consultancy Jato Dynamics, BYD registered 7,231 units, surpassing Tesla by 66 vehicles.
The shift signals a shrinking market share for Tesla. According to Tero Kallio, CEO of Finland’s Automotive Industry Association, such a steep and sudden decline for Tesla was unexpected as recently as last autumn.
Data from the European Automobile Manufacturers’ Association (ACEA) shows that Tesla’s European sales have dropped for five consecutive months. At the same time, sales of other electric vehicles have increased.
Tesla, once seen as a tech pioneer disrupting the auto industry, is now competing in a more crowded market. Traditional carmakers have launched multiple EV models, surpassing Tesla’s limited range.
Meanwhile, BYD has taken the lead. Founded in 2003, the same year as Tesla, BYD sold 1.76 million battery electric vehicles (BEVs) in 2023. Including plug-in hybrids, its total sales reached 4.27 million. Research firm Counterpoint Research projects BYD will overtake Tesla in BEV sales this year.
BYD's strength comes from its dominance in China, where nearly two-thirds of new EVs are sold. Chinese state subsidies, totalling around $230 billion between 2009 and 2023, have fuelled the sector. Though official subsidies have ended, intense price competition continues.
In May, BYD announced domestic price cuts of more than 30 percent on its cheapest models. Other Chinese manufacturers have followed. Tesla has also lowered prices but is losing ground in China.
Despite its growth, even BYD faces headwinds. Maintaining sales momentum remains a challenge. Great Wall Motor’s chairman Wei Jianjun warned of possible bankruptcies among Chinese carmakers due to aggressive price competition.
Europe’s EV market also faces structural pressures. The EU requires carmakers to reduce fleet emissions significantly. Kallio estimates one in four new cars must be fully electric to meet these targets. Currently, the share is around 15 percent.
Failure to meet emission targets could cost automakers up to €15 billion in fines. Yet demand for EVs has not grown at the pace the EU expects. Some member states have also cut back on EV subsidies, making targets harder to reach.
In the United States, EV adoption has also slowed. In April, S&P Global Mobility reported a year-on-year dip in EV demand for the first time in over a year. Tesla’s sales dropped 16 percent.
President Donald Trump has proposed legislation to remove tax incentives for EV buyers. His critical stance on electric vehicles, along with a public falling out with Tesla CEO Elon Musk, has brought additional uncertainty to the sector.
Trump has even claimed he will sell the Tesla vehicle he purchased earlier this year at a White House yard sale.
HT
