Europe's EV market shifts gears as Tesla loses grip

04 August 2025

The European electric car market is going through a major transformation. Overall sales of EVs continue to climb, registering impressive 23% year-over-year increase with 361,000 units in June, but the story behind the numbers reveals a changing of the guard. The once unshakeable dominance of Tesla is facing serious challenges from legacy automakers, new Chinese brands, and a surprising comeback from plug-in hybrids.

For years, the narrative in the EV space was dominated by pure battery-electric vehicles, but a new trend is emerging. BEV YoY growth stood at 16% in June, and PHEV sales shot up by an impressive 40%. This resurgence is led by competitively priced models that offer a practical bridge for consumers not yet ready to go fully electric.

A prime example is the BYD Seal U, a midsize SUV whose PHEV version has been a runaway success. With a starting price just under £34,000, it undercuts many gasoline-powered rivals. For that price, buyers get a combined 217 horsepower and a very usable 50 miles of all-electric range, making daily commutes possible without ever starting the engine. Volkswagen is also seeing growing sales with its new Tiguan PHEV, which delivers over 62 miles of electric range and offers DC fast charging.

As the landscape shifts, Tesla finds itself in a precarious position. The Tesla Model Y secured the top sales spot in June with 24,073 registrations, and the crossover is still Europe's best-selling EV, but the fate of its sibling, the Tesla Model 3, is far more concerning. The electric sedan saw its sales drop by 48% compared to June last year, with only 10,807 units sold. With the company's focus and discounts seemingly directed at the German-made Model Y, the Model 3 is losing ground.

As Tesla's fortunes turn, European automakers are stepping up with compelling electric cars of their own. Skoda has a certified hit with its new Elroq. This compact crossover, essentially a slightly shorter and more affordable version of the successful Enyaq, logged 9,825 registrations in June. With a starting price of £29,000, it offers tremendous value and is proving that mainstream brands can deliver popular EVs without hurting sales of their other models. The funky Renault 5 and its sporty cousin, the Alpine A290, are carving out their own niche with 7,788 combined sales.

After a three-year reign, Tesla has lost its crown as Europe's top-selling EV manufacturer. Volkswagen has claimed the top spot with an 11.2% market share, while Tesla has fallen to fourth place with just 6.1%. BMW and Mercedes-Benz hold the second and third positions, respectively. The rise of Skoda into the seventh spot is a clear sign that electric cars are becoming more mainstream, moving beyond the premium and early-adopter segments. The Chinese automaker BYD is quickly gaining a new audience as well, capturing 4.1% of the market.

Looking at the larger automotive conglomerates, the Volkswagen Group is the undisputed leader, commanding a massive 27.8% of the European plug-in vehicle market. The BMW Group sits comfortably in second place, while Stellantis struggles to keep pace.

The data also reveals interesting growth in smaller, niche segments. The Volkswagen ID.Buzz is helping to revive the MPV category, with sales in that segment nearly doubling this year. This diversification suggests the EV market is maturing, offering a wider variety of vehicles beyond the ever-so-popular crossover.

Via