Tesla sales drop 29% in the UK as Chinese EV brands flood the market

Tesla (TSLA.O) saw its UK car registrations drop sharply in December, as Chinese electric vehicle makers gained ground in Britain’s fast-growing but increasingly competitive market.

Industry data from New AutoMotive showed Tesla’s UK registrations fell more than 29% year-on-year to 6,323 vehicles in December, marking a weak close to the year for the U.S. electric carmaker. For 2025 as a whole, Tesla’s UK sales declined 8.9%.

The slump highlights mounting pressure on Tesla in Europe, where competition from Chinese brands, an ageing vehicle lineup and scrutiny of CEO Elon Musk’s political stance have weighed on demand.

BYD Surges as UK Car Registrations Hit Post-Pandemic High

In contrast, BYD (002594.SZ) recorded a near five-fold jump in UK registrations in December, reaching 5,194 units, according to New AutoMotive. The Chinese automaker is rapidly closing the gap with Tesla in Britain, even as the U.S. firm remains the country’s best-selling electric car brand.

Tesla recently lost its title as the world’s top EV maker to BYD after reporting a second consecutive year of declining annual sales.

The pressure is not limited to the UK. Tesla registrations in the Netherlands fell 27% to 4,300 vehicles in December, according to industry group RAI Vereniging.

EV Price Competition Reshapes Britain’s Auto Market

Despite Tesla’s decline, Britain’s broader car market showed renewed strength. New car registrations rose 3.5% in 2025 to 2 million vehicles — the first time sales reached that level since the pandemic, data from the Society of Motor Manufacturers and Traders (SMMT) showed.

“Rising EV uptake is an undoubted positive, but the pace is still too slow and the cost to industry too high,” said Mike Hawes, SMMT’s chief executive.

Chinese brands are becoming a major force. SAIC-owned MG (600104.SS) ranked second among Britain’s best-selling car brands in December, while BYD placed sixth, according to SMMT data.

“While the transition to EVs isn’t quite happening at the pace some predicted, the influx of new models and brands from China is creating fierce competition that will continue to force prices down,” said Steve Walker, head of digital content at Auto Express.

Read more on Global EV sales slow to 21-month low as China stalls, US incentives end