AUSTIN, Texas — Tesla Inc.’s TSLA sales have shrivelled in its two most important foreign markets, falling 49% in Europe and 27% in China between January and July, even as the electric-car maker began selling locally made vehicles in both regions. The decline is a stark contrast to Tesla’s all-time delivery record headline from the third quarter and comes as Chief Executive Elon Musk cranks up pressure on a $1 trillion autonomy bet centred on robotaxis and AI software, Nov. 26, 2025.
Tesla sales skid in places where electric vehicle demand is still heating up
Tesla sales are falling in Europe even as the region’s electric-vehicle market continues to grow. Tesla registrations in the European Union, Britain and EFTA countries collectively slumped 49 per cent to 7,336 vehicles from a year earlier, data released on Thursday by the European Industry Association (ACEA) showed. Auto industry research group JATO Dynamics reported last week that battery-electric vehicle sales across Europe rose 28% year over year in April.
That April collapse was the fourth consecutive month that Tesla’s sales had fallen in Europe, and it slashed its market share in half, to about 0.7 per cent from 1.3 per cent a year earlier. Analysts and local media have cited a lacklustre performance of the updated Model Y, aggressive price and product moves by Chinese brands like BYD, as well as a spate of protests and boycotts over Musk’s politics, particularly in Germany and the Nordic countries.
China’s three-year low increases the drop
If Europe is a cautionary tale, then China is a frenzied flashing red light for Tesla sales. Tesla sold 26,006 vehicles in China in October, a 35.8 per cent decline from a year earlier and the company’s lowest monthly tally there in three years, according to figures from the China Passenger Car Association cited by Reuters.
Tesla’s share of the Chinese market closed at 3.2 per cent in October, down from 8.7 per cent in September, despite its Shanghai factory posting a two-year high in exports. Local rival Xiaomi, by contrast, announced record EV sales of just under 49,000 in the same month – a potent indicator that domestic brands are winning over buyers who once considered Tesla their default premium pick. For investors, the message is clear: headline export strength can only partially mask just how severe the slump in core Chinese demand for Tesla sales really is.
Tesla sales articles mask weak demand.
At first glance, the picture is less stark around the world. Tesla delivered 497,099 cars in the third quarter of 2025 — enough to set a new company record — and produced 447,450 vehicles, according to its own third-quarter delivery statement. Wall Street had been expecting Tesla to deliver around 440,000 vehicles, so Tesla easily beat consensus.
But analysts note that the Q3 spike was primarily a rush by U.S. buyers to beat the Sept. 30 expiration of a $7,500 federal electric vehicle tax credit, pulling forward some demand that might otherwise have supported Tesla sales in the fourth quarter. Papers from Business Insider and others observe that deliveries in the first and second quarters were down roughly 13 percent year over year, full-year 2025 volume is forecast at a subscriber-indicated about 1.6 million vehicles — still some 10 percent below the previous estimate for 2024 — even after this quarter’s record, and early feedback rumored to be seeping into earnings means it is business as usual. When you take out Europe and China, much of Tesla’s growth story now rests on one-off incentives at home rather than on broader global demand.
The $1 trillion gamble to remove deadly slay from drivers faces a bigger reality.
His response to Tesla’s slumping sales is to persuade shareholders that the company is less a carmaker than a software-and-robotics powerhouse of the future. Earlier this month, Tesla investors approved a $1 trillion pay package that would eventually enable Musk to own 25 per cent of the company if he meets high-flying goals — including driving Tesla’s valuation to $8.5 trillion and producing 20 million vehicles annually while deploying 1 million robotaxis in commercial use. The compensation plan effectively hardwires Tesla’s future to autonomy and AI rather than traditional vehicle margins.
Bulls say that robotaxis and humanoid robots can unlock an opportunity worth well over $1 trillion, with more aggressive forecasts envisioning a “golden age of autonomous” services that would surpass the car business as we know it today. But Waymo and other rivals already have fully driverless fleets in a number of U.S. cities, while Tesla still uses human-supervised “Full Self-Driving” and is under regulatory scrutiny for years-old safety and marketing claims. The longer European and Chinese Tesla sales remain in the doldrums, the higher that bar becomes for Musk’s bet on autonomy to justify his enormous pay package.
Warnings about Tesla’s sales have been mounting for months.
None of this is occurring in a vacuum. In a March analysis, The Verge charted how Tesla’s geriatric lineup, the lack of affordable model options, political pushback, and increasing competition had already rendered the brand “toxic” for certain buyers while also pushing the company into a sustained global sales decline. Months later, Europe’s 49 per cent April plunge and China’s October three-year low have, in many ways, confirmed that the warning signs were no anomaly but the opening act of a more comprehensive correction.
For now, investors are stuck between two narratives: a core-selling bruiser of a slump at Tesla and an audacious $1 trillion autonomy gamble that might redefine the company if it hits — or reveal how much time has been wasted chasing a future competitors are already making real.
