Volkswagen has dethroned Tesla as Europe’s best-selling electric vehicle brand, marking another setback for Elon Musk’s automaker following its loss of global EV leadership to China’s BYD last year.

Data from JATO Dynamics released on Thursday showed Volkswagen brand battery electric vehicle sales in Europe rose 56% in 2025 compared to 2024, driven by strong performance from its new ID.7 model. The German automaker sold 274,278 BEVs across Europe during the year.

Tesla, meanwhile, saw registrations drop 27% over the same period, selling 236,357 vehicles – nearly 38,000 fewer than Volkswagen.

Ageing lineup faces mounting pressure

Tesla’s relatively small and ageing car lineup faces increasingly tough competition in Europe from both traditional European automakers and a growing number of Chinese rivals entering the market. The company has also confronted consumer backlash in Europe over CEO Elon Musk’s public backing of far-right political parties across the continent.

The shift in market leadership comes as Tesla struggles to maintain its dominance in key markets. China’s BYD overtook Tesla as the world’s largest EV manufacturer in 2024, capitalising on aggressive pricing and rapid model expansion.

Europe’s EV market surges

Despite Tesla’s struggles, electric vehicles made “significant step forward” in Europe during 2025, according to JATO Dynamics. Fully-electric car registrations jumped 29% compared to the previous year, vastly outpacing overall car registration growth of just 2.3%.

The robust EV performance suggests European consumers are accelerating their transition to electric mobility, driven by expanding charging infrastructure, improving vehicle range, and tightening emissions regulations across the continent.

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Photo of the Volkswagen ID.7, source Volkswagen