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Tesla (NASDAQ:TSLA) just hit a wall in Europe's EV race. Once the poster child of electric mobility on the continent, Tesla's grip is slippingfast. Last month, Tesla sales dropped 49% year-on-year, down to just 7,165 units. The Model Y, which had been Europe's best-selling car, plunged 53%, falling to 9th place in the BEV rankings. Meanwhile, the broader market is thriving. Battery-electric vehicle registrations jumped 28%, plug-in hybrids rose 31%, and legacy players like Volkswagen are cleaning up. VW sold 23,514 EVs in the same montha 61% surgethanks to the strength of its ID lineup.
And here's the plot twist: BYD (BYDDF) just passed Tesla in Europe. Yes, that BYD. With 7,231 EVs registered, the Chinese automaker edged into 10th place, leaving Tesla in the rearview mirror. That may not sound like a big gap, but the symbolism is huge. BYD only began serious operations outside of Norway and the Netherlands in late 2022. Now, it's beating Tesla on Tesla's home turfpure-play EVs. How? BYD is leaning into PHEVs, which aren't touched by Europe's new tariffs on Chinese BEVs. It's a playbook that's workingfast.
This is a watershed moment, said Felipe Munoz at JATO Dynamics. And he's right. Tesla once led Europe's BEV charge. Now it's losing share to legacy giants and newcomers alike. For investors, this isn't just about one bad month. It's about momentum. Tesla built its edge on first-mover advantage, brand appeal, and scale. But those moats may be shrinking. As the market pivots to a more diversified EV landscape, the question is no longer who invented the gameit's who's winning it now.
This article first appeared on GuruFocus.