Tesla Regains Momentum in China, But Struggles Persist in Europe
As Tesla rolls out the refreshed Model Y, the company is seeing promising results in China, but the situation remains uncertain across several European markets. Early data for the first quarter of 2025 reveals a stark contrast between the brand’s performance in these two key regions.
For months, media outlets have been raising concerns about Tesla’s declining sales figures, particularly in Europe. These concerns, while valid, require a nuanced look. The beginning of 2025 has been a transitional period for Tesla, marked by the launch of the updated Model Y — widely considered the brand’s most profitable vehicle. Given this context, many experts advised holding off on final judgments until the first set of quarterly figures was available.
Ahead of the official Q1 2025 sales data release, scheduled for Wednesday, April 2, emerging trends are already becoming clear. A closer look at Tesla’s performance in China versus Europe reveals diverging trajectories.
A Strong Rebound in China
In China, where deliveries of the new Model Y began in late February, Tesla is showing strong signs of recovery. According to data cited by Teslarati, the company sold 43,370 units of the refreshed Model Y in March alone, making it the best-selling electric vehicle in the country for that month.
Industry analyst Tsla Chan estimates that Tesla is on track to sell nearly 140,000 vehicles in China for the first quarter of 2025 — a significant improvement over the same period in both 2023 and 2024. These figures suggest that Chinese consumers have responded favorably to the updated design and features of the Model Y, and that Tesla may be heading for its strongest start to the year ever in this key market.
Europe Remains a Challenge
The picture in Europe, however, is far less encouraging. According to a Reuters analysis, Tesla’s Q1 2025 sales are down year-over-year in eight European countries: France, the Netherlands, Norway, Sweden, Denmark, Spain, Portugal, and Italy.
While March did bring a small glimmer of hope — with deliveries of some versions of the updated Model Y beginning in select European markets — only Spain, Italy, and Portugal showed any signs of growth. Even then, the increases in Portugal were minimal, while the broader European numbers continued to decline.
A key factor behind this underperformance is the delayed availability of the most affordable version of the Model Y — the rear-wheel drive variant. This version is the most popular among European consumers and the only one eligible for government subsidies in countries like France. The absence of this model has significantly impacted Tesla’s numbers, particularly in France, where sales dropped by 37% in March 2025 compared to March 2024. The decline is even more pronounced when looking at the full quarter, with a 41% year-over-year decrease.
Outlook Remains Unclear
Although Elon Musk’s public image may be a contributing factor to Tesla’s recent struggles, especially in Europe, it’s still too early to draw definitive conclusions about long-term impacts. The next few months will be critical. As production of the refreshed Model Y ramps up and more variants become available in Europe, it remains to be seen whether Tesla can reverse the current trend and win back market share.
In short, while Tesla is clearly gaining ground again in China, its European rebound is far from guaranteed. With the global EV market becoming increasingly competitive, the company’s ability to adapt quickly will determine its success across diverse regions.