On August 5, new automotive industry data revealed how EV brands are faring in the U.K. and Germany, and the update marks yet another chapter in the saga of Tesla’s terrible, horrible, no good, very bad year.Â
According to the reports, Tesla’s European sales slumped in July, as sales of its top competitor, the Chinese company BYD, shot up. This isn’t exactly a new story: Since the beginning of the year, Tesla’s European sales have been trending on a sharp downward decline, while BYD has made major headway in expanding through global markets.Â
As this pattern continues to play out, the data points to the possibility that BYD is on a fast track to overtake Tesla at the top of the EV market.
Tesla continues to stumble in the U.K. and Germany
According to data from the U.K.’s Society of Motor Manufacturers and Traders (SMMT), Tesla’s new car sales in the U.K. dropped by nearly 60% to 987 units in July, down from 2,462 year-over-year. The story was much the same in Germany, where the brand’s new car sales fell by around 55%, based on data from the road traffic agency KBA.
Tesla’s slump can’t be attributed to an overall decline in the EV market, either: Total EV sales were up by 9.1% for the month in the U.K., and up 58% in Germany.
BYD, on the other hand, saw massive gains in Europe this past month. In the U.K., the brand quadrupled its year-over-year sales for the month to a total of 3,184. In Germany, sales went up almost fivefold to 1,126 cars sold.
At this point, Tesla is falling solidly behind BYD in the European market. By late March of this year, Tesla had already sold nearly 43% fewer cars in the region compared to the same period in 2024. In May, its sales in the U.K. and Germany plummeted to multi-year lows, allowing BYD to surpass it on European sales for the first time ever. Now, it seems like BYD’s upward trajectory is only getting started.
BYD may be on a path to EV market domination
Tesla and BYD’s battle for market dominance in Europe might be a harbinger of what’s to come for the two brands on a global scale. In 2024, BYD topped Tesla in terms of total revenue, but it still lagged behind on overall profitability. In 2025, that narrative may be shifting.
Per its most recent second quarter earnings report, published at the end of July, Tesla notched its steepest decline in quarterly revenue in more than a decade, with a 12% fall. The news has caused investors to question whether Tesla CEO Elon Musk’s involvement in American politics has permanently damaged the brand. Meanwhile, BYD saw its revenue rise by 37.4% year-over-year in its most recent first quarter report.
As pressure continues to mount against Tesla, the brand is beginning to bet more of its resources on breaking into the nascent robotaxi industry. On August 1, though, a Florida court verdict called the safety of Tesla’s Autopilot function into question, a development that may stifle Tesla’s robotaxi plans before they even get off the ground.
Tesla’s compounding struggles, combined with BYD’s meteoric success, may result in a very different global EV landscape by the end of this year. BYD’s second quarter results, which are likely to publish at the end of August, will shed more light onto how the company is currently faring—and how soon it might be poised to dethrone Tesla on profit.
Â
