Tesla Sales Crash in China and Europe as BYD, Xiaomi Take the Lead

Tesla’s global sales are facing a sharp decline in 2025, with the situation particularly grim in China and Europe. According to recent data, Tesla sold just 61,662 vehicles in China in May—including both domestic and export units. That marks a 15% drop year-over-year, despite the fully refreshed Model Y being available for the entire month.

The slump in China isn’t new. Tesla has seen a continuous decline in sales for eight straight months, and now it's not just BYD outperforming Tesla in consumer preference—but Xiaomi’s new EVs are also gaining traction.

Between January and May 2025, Tesla shipped 292,875 vehicles in China, which is 17.6% less than the 355,616 units shipped during the same period in 2024. The Model Y refresh clearly hasn’t revived demand.

In Europe, where the EV market is booming, Tesla is one of the few automakers losing ground. Sales have sharply declined in core countries like Germany, France, Belgium, Spain, Sweden, and Denmark.

One exception seems to be Norway, where Tesla’s May sales shot up by 213% year-over-year. However, this is misleading—Tesla sold so few cars in Norway in May 2024 that the percentage increase doesn’t reflect real growth. Compared to May 2023, sales are still down.

Initially, Tesla pointed to the Model Y refresh for weak Q1 numbers, but now that production lines are running at full tilt, it’s obvious the problem lies in waning consumer demand. The company's move to offer discounts and 0% interest financing on the Model Y further highlights this demand crisis.