Summary
New-car registration data for January show a widening divergence between Tesla and BYD in Europe. Tesla’s volumes fell for a 13th straight month amid intensifying price competition and a flood of off-lease vehicles depressing used values, while BYD extended rapid gains by leveraging lower costs and a growing lineup.
Key figures
- Tesla: 8,075 registrations across the EU, U.K., Switzerland, Norway, and Iceland; -17% year over year; market share slipped to 0.8% from 1.0%.
- BYD: 18,242 registrations; +165% year over year; market share rose to 1.9% from about 0.7% a year earlier.
- Overall market (EU, U.K., EFTA): registrations down 3.5% to 961,382 vehicles.
- Powertrain mix: petrol -26%; battery-electric +14%; plug-in hybrid +32%; hybrid-electric +6%.
Main drivers
- Product cycle and competition: Analysts note Tesla’s limited new-model activity in Europe versus a wave of affordable EVs from BYD, MG, and Zeekr.
- Used market pressure: Large volumes of 4–6-year-old Teslas returning from leases are driving down secondhand prices, weighing on new-car pricing and residual values.
- Cost advantage: BYD and other Chinese automakers benefit from structurally lower costs; while the gap is narrowing in batteries and manufacturing, it is not expected to close fully in the next five years.
- Brand headwinds: Tesla’s image in Europe has deteriorated, with reputational issues tied to Elon Musk’s political profile compounding product and pricing challenges.
Implications
- Pricing pressure will likely persist as value-focused buyers gravitate to lower-cost entrants and as used EV supply expands.
- Manufacturers are responding by cutting costs, localizing where possible, and launching lower-priced models to defend share.
- Demand is shifting toward electrified powertrains even in a softer overall market, raising the bar on timely model refreshes and competitive MSRPs.
What to watch next
- New model introductions and refresh cadence from Tesla and European incumbents.
- BYD’s continued export ramp and lineup expansion in Europe.
- Used EV price trends and their impact on leasing, residuals, and dealer inventory.
- Country-level policy and incentive changes shaping EV affordability and adoption.
