Tesla trails Volkswagen in Q1 EV sales, Model Y still on top

Volkswagen surpassed Tesla in Q1 2025 electric vehicle (EV) sales in Europe.

The German automaker sold 65,679 battery EVs compared to Tesla’s 53,237 in the first three months of the year, per JATO Dynamics data. Volkswagen’s registrations soared 157% year-over-year (yoy), while Tesla saw a 38% decline in the same period, the steepest among the top 30 brands. The German automaker’s strong performance highlights a growing competitive landscape in the EV market.

Despite losing the overall lead, Tesla’s Model Y and Model 3 remain the top two in Europe’s battery EV registrations. Volkswagen’s ID.4 ranked third in EU registrations, trailing the Model 3 by 2,000 units.

Model Y registrations dropped 43% in March, but the Model 3 increased 1% in the first quarter. The decline in Model Y registrations could be linked to Tesla’s upgraded Model Y, which debuted at the beginning of the year. In the first quarter, Tesla retooled and upgraded its factories worldwide to produce the new Model Y.

“As the brand continues to deal with a host of PR issues in addition to the changeover of the Model Y, Tesla is now relying on the Model 3 to offset its losses. Despite the controversy surrounding the brand’s CEO and the limited availability of the new Model Y, Tesla continues to perform well,” said Felipe Munoz, a global analyst at JATO Dynamics.

Tesla addressed its Q1 challenges during its recent earnings calls, with CEO Elon Musk attributing the dip to seasonal and strategic factors.

“Now, Q1, [the] first quarters of a year, are usually pretty tricky. Because it’s usually the worst quarter of the year because people don’t want to go buy a car in the middle of winter during the blizzard. So we picked Q1 as a good quarter to do a cutover to the new version of the Model Y and we changed the production of the world’s best-selling cars with — remember, the Model Y is the best-selling car of any kind on earth with a 1.1 billion unit per year output of a single model,” Musk stated.

Volkswagen’s surge reflects its continued focus on and dedication to EVs. While Tesla’s Model Y remains the global best-seller, Volkswagen’s momentum signals intensifying competition. As both companies navigate market dynamics, Tesla’s focus on its Robotaxi network and upcoming launches will be critical to regaining its edge.

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