Tesla UK sales drop 45% amid EV industry growth in May

Sales of Tesla’s electric vehicles in the UK plummeted by more than 45 per cent in May compared to the same period last year, highlighting increasing challenges for the company as it faces intensifying competition. The decline marks the fifth consecutive month of shrinking sales figures in the UK as well as other key European markets, including Germany and Italy. Data from research firm New Automotive indicates that Tesla sold just 1,758 vehicles in Britain last month, a significant fall from the 3,244 units sold in May 2024.

This sharp decline contrasts with the broader growth of the electric vehicle (EV) market in Britain, which recorded a 28 per cent rise in EV sales overall. Despite the drop, Tesla remains the top-selling battery electric vehicle producer in the UK on a year-to-date basis. However, market analysts suggest that the brand’s downturn reflects greater challenges from aggressive EV competitors offering more competitively priced models, particularly from Chinese manufacturers. Globally, Tesla has faced pressure as rivals continue to strengthen their foothold in the sector.

In Germany, Europe’s largest automotive market, Tesla’s decline has been equally striking. The German road traffic agency KBA revealed that Tesla’s May sales dropped by 36 per cent year-on-year to 1,210 units, while EV sales in the country as a whole surged by 45 per cent. Chinese competitor BYD saw exceptional growth during the same period, increasing sales ninefold to 1,857 vehicles in Germany alone.

The response to Tesla’s revamped Model Y has been a glimmer of hope, with expectations that the updated version will drive sales once UK deliveries begin in June. In Norway, where deliveries of the new Model Y have already gone live, Tesla recorded improved performance, signalling possible positive developments for other European markets as the rollout continues. Nevertheless, the question remains whether these gains will be sufficient to reverse the overall declining trend.

Compounding Tesla’s issues is a growing backlash against Elon Musk’s political affiliations, with protesters across Europe urging boycotts of the brand. Concerns over Musk’s controversial stance on various political issues, including his alliance with far-right policies during his tenure as an adviser to President Trump, have fuelled criticism. Reports indicate that Tesla investors have urged the company’s board to demand more attention from Musk, calling for him to dedicate at least 40 hours per week solely to managing Tesla amid concerns over the firm’s declining global reputation.

Tesla’s stock price has also been impacted by this turmoil, dropping 3.6 per cent to close on Wednesday at $332.05. With the combined effects of rising competition, political controversy, and internal management concerns, the company faces mounting pressure to adapt swiftly in one of the world’s most competitive EV markets.