An already difficult month for Tesla (TSLA) and Elon Musk is about to get even worse.
Once hailed as the undisputed leader of the booming electric vehicle (EV) market, Tesla is now struggling to make up the ground it has lost recently, primarily due to backlash against Musk. The CEO’s polarizing nature and political affiliations have caused many consumers to turn their backs on both him and the company.
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This trend has severely compromised Tesla’s sales, as demonstrated by the company’s underwhelming Q1 earnings report. The automaker came in below even Wall Street’s scaled-back estimates on key metrics, showing that its problems are even worse than some experts anticipated.
Tesla’s uphill battle isn’t confined to the U.S., though. Competition is rising in the global EV market, and a new development in an important market suggests the company has new problems.
Elon Musk and Tesla are facing an uphill battle as compeition mounts in one of its biggest markets.
Image source: Apu Gomes/Getty Images
Two shocking companies are threatening Tesla in a top European market
European consumers haven’t held back in letting the world know how they feel about Musk. Protests against both him and Trump have raged across cities such as London, Berlin, and Paris, and in some cases, Tesla dealerships have been set on fire.
Related: Controversial EV tax credits will be bad news for Tesla
It’s not a stretch to say that Tesla is experiencing a European nightmare, as sales across the continent continue to decline. But in the UK, things are particularly concerning, as Tesla is being overtaken by two shocking companies, something it really can’t afford right now.
To illustrate how bad things are for Tesla in Britain, the EV producer sold only 512 cars there last month, after selling over 1,300 in April 2024. Meanwhile, Tesla’s primary rival, Chinese tech leader BYD (BYDDY) , sold 2,511 cars in the UK, an increase of 650%.
BYD isn’t the only Chinese automaker that outsold Tesla in the UK in April 2025, though. Two much-smaller automakers called Jaecoo and Omoda, both owned by tech conglomerate Chery International, sold 1,053 and 910 cars, respectively, both of which came in well above Tesla.
Granted, these small automakers both offer EVs, hybrid vehicles, and gas-powered cars, while Tesla sells only EVs. But the clear takeaway is that Tesla, one of the world’s best-known companies, is losing a key race to two companies that until recently, many people outside China probably hadn’t heard of.
As Business Insider reports, “getting lapped by two virtually unknown Chinese rivals is a sign of just how much trouble Tesla faces in Europe, its third-biggest market.”
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Meanwhile, things continue to look increasingly grim for Tesla in many other European nations. Data shows that sales for the company are down 67% in Denmark, 74% in the Netherlands, and 81% in Sweden, to name just a few. Per CNN:
“In the UK, one of the few European markets where Tesla reported stronger sales in the first quarter, April sales plunged 62%, according to UK auto industry trade group SMMT. The drop came even as overall EV sales rose 8% in the UK for the month.”
Tesla’s path to recovery in Europe is looking increasingly bleak
For Tesla, the writing is on the wall. In both the U.S. and Europe, EV demand is rising but its sales are falling, indicating that the company’s brand has taken significant damage that won’t be easy to repair.
Related: Key analyst believes Tesla and Elon Musk are running out of time
That isn’t to say that Musk is trying to fix the problems he caused for his company. Tesla recently announced plans to offer the Model Y with a lower interest rate, but that isn’t likely to boost sales, as it doesn’t actually save customers much money on an already-expensive vehicle.
Instances like this have prompted many people to speculate that Tesla would be better off without Musk, including prominent investor and shareholder Ross Gerber. Now, as the company’s share of its third-largest market is compromised, more shareholders may advocate for the same thing, as Tesla’s growth prospects continue to dwindle.
The threat that BYD poses to Musk’s company on a global scale has come sharply into focus in recent years, as the Chinese auto giant has continuously managed to outsell Tesla. Now, two unknown automakers are doing the same, showing that Tesla is truly no longer the dominant EV leader.
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