BYD overtakes Tesla in Europe as electric car sales reach new record

Europe's car market showed surprising strength in July, posting its best monthly growth in over a year as sales climbed 5.9% to 1.09 million vehicles. The boost for the auto industry wasn't driven by a renewed love for gasoline engines, but by a massive surge in demand for electric cars.

This electric wave also brought a major shift in the market's hierarchy. For the first time, Chinese automaker BYD sold more EVs in Europe than its well-known American competitor, Tesla.

The switch to electric power is happening faster than many predicted. Data from the European Automobile Manufacturers' Association (ACEA) shows that in the European Union, nearly 60% of all new cars sold in July were electrified in some way. This includes fully electric cars, plug-in hybrids, and standard hybrids.

That figure, 59.8% to be exact, is a big jump from the 51.1% market share these vehicles held just one year ago. Sales of pure battery-electric cars (BEVs) saw their largest jump since August 2023, rising by 39.1%. Plug-in hybrids (PHEVs) had an even better month, with sales increasing by 56.9% - the biggest leap since the ACEA started reporting that specific figure in early 2023.

Much of this growth can be traced to Europe's largest car market: Germany. The German government introduced a new incentive plan in June to encourage people to buy electric cars. The effect was immediate. In July, sales of fully electric cars in Germany leaped by 58%, while sales of plug-in hybrids rocketed up by 83.6%.

This strong performance in a single country highlights how government action can directly influence consumer choices and accelerate the move away from fossil fuels. Overall, car sales in Germany grew by 11.1%, helping to lift the entire continent's numbers.

As the market for EVs is booming, the month of July delivered a shock to the established order. The most talked-about development was the dramatic reversal of fortunes for Tesla and BYD. Tesla saw its European sales fall by 40.2% compared to July of last year. This steep drop caused its share of the market to shrink from 1.4% to just 0.8%.

It was the seventh consecutive month that Tesla's market share had declined in the region. At the same time, Chinese manufacturer BYD, now being included in the monthly sales report, experienced explosive growth. Its sales jumped by 225.3%, giving it a 1.2% share of the European market and putting it ahead of Tesla.

The continent's traditional automakers reported a mixed bag of results. The Volkswagen Group had a solid month, with its sales increasing by 11.6% across its various brands. France's Renault Group also saw growth, with sales up 8.8%. But it wasn't a good month for everyone - Stellantis saw its sales fall by 1.1%.

The positive news from July wasn't universal across Europe. Germany, Spain (+17.1%), Poland (+16.5%), and Austria (+31.6%) all saw strong sales growth, but other major markets declined. Sales were down in the United Kingdom (-5%), France (-7.7%), and Italy (-5.1%).

Even with the record sales of electric cars, the industry itself appears to be anxious about the future. The ACEA recently sent a letter to the European Commission President, stating that the target to end the sale of new combustion engine cars by 2035 is "no longer feasible." The Old Continent seems to have its wires crossed: just as European consumers are buying EVs in record numbers, the industry's main lobby group wants to slow down the transition.

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