Tesla Model Y: World's Best-Selling EV SUV Despite European Production Slump

The Tesla Model Y remains the world's best-selling electric SUV despite a 30% drop in European production in 2025. The Berlin Gigafactory is running at just 40% of its theoretical capacity, producing 149,000 units against a possible 375,000. Yet, the Model Y retains its top spot in France and is regaining ground against European competition.

"And this is only the beginning. With a changed market and increasingly aggressive competition, it will be very difficult for Tesla to return to the Model Y volumes of the past." — Analysis by Motor1

A European Paradox: Leader but Underperforming

The Berlin Gigafactory perfectly illustrates Tesla's challenge. Capable of producing 375,000 vehicles per year, the factory assembled only 211,000 Model Ys in 2024, or 56% of its capacity. In 2025, the decline accelerated with only 149,000 units produced according to Inovev data, representing a utilization rate of 39.7% of the production lines.

André Thierig, the plant director, contests these figures on LinkedIn. He claims that "at least 200,000 vehicles" were produced in 2025, citing necessary shutdowns for the transition to the Model Y Juniper and the ramp-up towards 5,000 units per week.

The IG Metall union is concerned about jobs while Elon Musk promises to expand the factory further. But with European Model Y sales dropping from 210,000 units in 2024 to around 150,000 in 2025, the strategy seems misaligned with demand.

French Resilience: Back on Top

Paradoxically, the Model Y is regaining its shine in France. After a catastrophic January with only 613 registrations, February 2026 marks a spectacular comeback with 3,034 units sold. The American SUV reclaims the top spot in the French electric rankings, ahead of the Renault 5 E-Tech (2,639 units) and the Renault Scénic (2,127 units).

This recovery is explained by several factors. First, a catch-up effect after homologation delays for a new battery. Second, attractive pricing: the Propulsion version starts at €39,990 with a 534 km WLTP range, while the Grande Autonomie reaches €44,990 for 657 km.

The French social leasing scheme is also boosting sales. In an overall market down 14.7% with 120,764 total registrations, electric vehicles are up 27.8% and reach a 26.8% market share.

When Will the 7-Seater Version Arrive in Europe?

Tesla already sells a 7-seater version of the Model Y in Europe, but it's an adaptation with two foldable seats in the trunk. The third-row space remains limited, suitable mainly for children on short trips.

The Model Y L with 6 seats and a longer wheelbase remains exclusive to Asian markets for now. Tesla just announced its launch in Australia and New Zealand for 2026, but no date has been given for Europe. This version offers genuine third-row habitability thanks to its 19 cm extra wheelbase and its 2+2+2 configuration.

Musk's Diversification Strategy

Faced with declining Model Y sales, Elon Musk is betting on diversification. He mentions producing the Cybercab, the Semi, and other models in underutilized factories. The Cybertruck is struggling to gain traction in the US, and production of the Model S and Model X has ceased without an announcement of replacements.

The loss of carbon credits is also a concern. Toyota and Stellantis are considering stopping their purchases of emission credits from Tesla, which could cost the American manufacturer several billion dollars.

Chinese Competition Gains Momentum

Tesla no longer has a monopoly on the premium electric SUV segment. BYD is progressing rapidly in Europe, while brands like the Volkswagen ID.4, Skoda Elroq, and Renault Scénic are chipping away at market share. In Italy and France, the Model Y has even temporarily lost its crown as the best-selling electric vehicle.