Tesla has suffered a major setback in the UK market.

According to the latest data from the Society of Motor Manufacturers and Traders (SMMT), the American EV maker's UK registrations crashed 60% year-over-year in July, dropping from 2,462 units to just 987.

In stark contrast, Chinese rival BYD posted explosive growth, with July registrations skyrocketing over 400% to 3,184 vehicles — easily outpacing Tesla as the month's leader.

Tesla's European woes extend far beyond Britain. The Financial Times reports the company faces broad challenges across major European markets, driven by consumer backlash against Elon Musk's political stances and intensifying competition from rivals like BYD.

Official industry figures show Tesla's July registrations plunged 86% in Sweden (to 163 units), fell 27% in France (1,307 units), and dropped 58% in Belgium (460 units).

These declines are particularly striking as they follow Tesla's recent launch of an upgraded version of its flagship Model Y SUV. New product releases typically boost sales, but market response has fallen well short of expectations.

Meanwhile, BYD's European expansion continues to gain momentum. The company's accelerating regional rollout — with competitive product lines and pricing — poses a significant threat to traditional EV leaders.

UK Market Faces Broad Slowdown

Tesla's slump reflects wider weakness in Britain's auto market. Uncertainty about eligibility criteria for the government's revised EV subsidy program has caused many buyers to delay purchases.

On Tuesday, the UK government announced four Citroën EV models would qualify for its £650 million subsidy scheme, offering buyers £1,500 in savings. Despite this, Citroën's July registrations still fell 41%.

Other major brands face similar challenges: Fiat registrations dropped 43%, Honda fell 46%, BMW declined 18%, and Toyota slid 23% — signaling a broader structural adjustment period for the UK auto sector.

Musk Controversies and Corporate Governance

Tesla's challenges extend beyond market competition to CEO Elon Musk's polarizing public image. Reports indicate consumer backlash against Musk's political positions is beginning to impact sales.

Meanwhile, Tesla's board disclosed Monday it approved a new compensation package for Musk, including 96 million stock options, designed to "motivate and focus" the billionaire CEO on reviving the struggling automaker.

This follows Musk's seven-year legal battle over a $56 billion pay package. After Delaware judge Kathaleen McCormick voided the package in January as excessively generous, Musk repeatedly threatened to shift his focus from Tesla to his other ventures — including SpaceX, xAI, Neuralink, and The Boring Company.

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