It’s no secret that Tesla had a tough run in Europe last year. After several years of outpacing legacy automakers in EV sales, 2025 brought a sharp reversal that few would have seen coming just a couple of years ago. The brand that once led the electric car race is now falling behind a familiar rival with a very different backstory.

Read: BYD Sold Nearly Three Times As Many Cars As Tesla In Europe

Volkswagen sold more battery-electric vehicles in Europe than Tesla last year. Yes, VW, the same manufacturer that was mired in the diesel emissions scandal just as Tesla was gearing up for the Model 3, has now overtaken the American brand on its home turf.

Changing of the Guard

According to figures from Dataforce reported by Autonews, the VW brand moved 274,417 fully electric vehicles in Europe in 2025, a jump of 56 percent from its 2024 total of 175,654. Things weren’t so pretty for Tesla.

Its sales declined 27 percent last year, dropping from 326,714 units to 238,765. This came despite the fact that the Tesla Model Y remains Europe’s best-selling EV with 151,331 units sold last year, significantly more than the 94,106 Skoda Elroqs that were sold over the same period. However, Model Y sales were still down 28 percent from 2024, when 210,265 were sold.

Europe’s Best-Selling EVs

Dataforce

Helping the VW brand take the top place from Tesla is the fact that it has a larger range of EVs. For example, the VW ID.4 sold 80,123 units last year, up 23.8 percent. A total of 78,667 VW ID.3s were sold, up 44.4 percent. The ID.7 also saw growth, with 76,368 units finding new homes, a 137.2 percent rise.

To put these figures into perspective, Tesla sold 86,261 Model 3s. And while that beat out any individual VW model, it was still down 23.6 percent from 2024.

VW Conquers All…Almost

VW’s strong year wasn’t limited to EVs. It also topped Europe’s plug-in hybrid (PHEV) segment, selling 159,173 units, a 205 percent jump from 2024. That was enough to comfortably beat BMW, with 142,285 sales, followed by Mercedes-Benz at 135,878 and Volvo at 104,270.

The VW brand also led in both gasoline and diesel vehicle sales. Its gas-powered lineup moved 737,821 units in 2025, staying well ahead of Peugeot’s 492,133, despite VW recording a 7.3 percent decline. Diesel sales reached 269,277 units, down 19.4 percent from the previous year, but still enough to edge out Mercedes, which sold 250,326.

Europe’s Top-Selling EV Brands

Dataforce

Traditional hybrids were the only powertrain segment that VW didn’t take top honors in, as Toyota held the crown with 626,675 sales. Although VW didn’t rank in the top five, things could change this year as it plans to launch the new T-Roc, complete with a hybrid powertrain.

Tesla has introduced a new seven-seat version of the facelifted Model Y Premium. It’s available exclusively on the all-wheel drive Premium variant and costs an additional $2,500.

While the company hasn’t provided specifics on the fold-flat third row, it appears nearly identical to the setup found in the pre-facelift Model Y, meaning it can accommodate two small children at best. Unfortunately, they won’t find much back there besides two cup holders and some armrests integrated into the cargo area.

More: Tesla’s Model Y L Gets Bigger And Pricier With New Six-Seat Layout

Pricing starts at $51,490 and the vehicle has an EPA-estimated range of 327 miles (526 km). The crossover can also accelerate from 0-60 mph (0-96 km/h) in 4.6 seconds, before hitting a top speed of 125 mph (201 km/h).

In other news, Tesla revealed all Premium and Performance variants will now come equipped with a black headliner and a larger 16-inch infotainment system. That’s up slightly from the previous 15.4-inch display.

Tesla didn’t mention additional changes, but reports suggest the model also gains matte black badging and a new 20-inch wheel design. The latter are known as the Helix 2.0 and they cost $2,000. Unfortunately, the titanium colored wheels lower the range of the aforementioned all-wheel drive Model Y Premium to 303 miles (488 km).

As the end of the year draws closer, Tesla has rolled out a set of last-minute offers designed to nudge buyers off the fence, something we’ve come to expect from the automaker in the final stretch of the calendar.

Arguably the most notable of these is a new financing deal for the entry-level Model Y Standard, now available with 0 percent APR on a 72-month term. That’s six years of interest-free payments, for anyone keeping count.

Read: Tesla Made The Model Y Standard Cheaper By Adding A Headliner To Hide The Glass Roof

The back-to-basics Model Y Standard was introduced a couple of months ago and prices start at $39,990 before destination and taxes. It’s based on the regular Model Y, but lacks many of its key selling points, including the panoramic glass roof and the front light bar. It also has a simpler interior.

Evidently, Tesla was eager to save as much money as possible when designing the car.

Zero Percent, But Not for All

When first launched, the Model Y Standard wasn’t included in Tesla’s promotional financing, but things have changed. It’s now available at 0 percent APR. However, this financing deal is only available if you’re willing to put down at least $2,069 at signing.

Additionally, you’ll need an excellent credit rating of 720 or above to get the deal. If your credit rating is between 680 and 720, the APR rises to 0.99 percent, or 1.99 percent with a 640-679 credit rating, and 2.99 percent with a sub-640 credit rating.

Tesla is offering the 0 percent financing deal for its 36-, 48-, 60-, and 72-month terms, but not its longest 84-month term.

Extras On the House

But wait, there’s more. Tesla is also tossing in a few extra incentives for EV buyers choosing from existing inventory. Depending on the car, some models are now being offered with one complimentary upgrade. A quick scroll through Tesla’s site shows examples with larger wheels, premium paint finishes, or the optional white interior included at no additional cost.

Whether this last-minute round of offers will give Tesla the year-end bump it’s chasing remains to be seen.

Germany’s car-check watchdog has crunched the reliability numbers and once again, Tesla finds itself parked at the very bottom of the heap. The 2026 TÜV-Report, covering annual roadworthiness inspections of approximately 9.5 million vehicles between July 2024 and June 2025, found that Tesla EVs occupied the two bottom spots in the league table.

The Model 3, which was the worst-ranked car for the two previous years was found to have a defect rate of 13.1 percent, meaning one in every 7.6 cars in the two-to-three-year-old ages group failed the Hauptuntersuchung safety check.

Why Is The Model Y So Troubled?

But the Model Y was even worse. It had a defect rate of 17.3 percent, versus 3.5 percent for a Mini Cooper SE, making it the worst TÜV has seen in this age group in a decade. The biggest defect culprits were the axle assembly, suspension, brakes and lighting.

Related: Tesla Is Now The World’s Most Avoided EV Brand And It’s Probably Musk’s Fault

Pulling back to look at the bigger picture covering cars of all ages reveals that 21.5 percent, or one in five cars failed the inspection due to a “significant” or “dangerous” defect, an increase of 0.9 percent on last year, ADAC reported. And the proportion with minor defects rose 0.8 percent to 12.3 percent.

Other reliability villains include the BMW 5-series and 6-series in both the 4-5-year-old and 8-9-year-old age groups, the Dacia Duster in the 6-7 and 10-11 age groups and the Renault Clio among 12-13-year-old cars.

Electric Cars Defect Rate, 2-3 Years Old

Pop the Champagne for VW

But with every list of losers there has to be a list of winners, and for cars that have passed their fourth birthday, this one is headed by Volkswagen.

The VW Golf wagon and T-Roc scored well in the 4-7-year-old categories and the automaker’s Touareg was top of the oldies. The Mazda CX-3 and Mercedes B-Class were also commended.

Looking at the 2-3-year-old group, Fiat’s 500e toped the small car category, proving to Tesla that EVs can be reliable, the Mazda 2 and BMW 1-series were the top-rated small car and compact, and the C-class took the mid-range award (if you’re reading from the US, those classifications will look kinda messed up).

The T-Roc popped up again to take best SUV, and the B-class bagged most reliable nearly-new minivan.

Rate of Serious Inspection Defects

One big change in this year’s study is the introduction of an award for long-term quality, handed out to brands whose vehicles, aged 10+ exhibit the lowest average defect rate for safety-related faults and stand for quality, durability, and good service.

Mercedes took gold with an 18.5 percent defect rate – almost matching that of a 2-3-year-old Model Y – Audi was second with 19.2 percent and Toyota snuck onto the podium’s last step with a 22 percent defect rate.

Winners By Segment, 2-3 Years Old

Winners In Other Age Groups

It looks like Tesla’s found itself with a problem of abundance. The automaker has more cars sitting on lots across the United States than it seems to know what to do with. And with the federal EV tax credit gone, sales have slowed considerably.

To keep things moving, Tesla has decided to do something a little different, by renting out its own cars directly to customers, starting at two locations in California, with more likely on the way.

Read: Elon Musk’s Trillion Dollar Pay Hinges On A Bet That Could Break Tesla

The company recently confirmed that its stores in San Diego and Costa Mesa are now offering rentals from the entire Tesla lineup.

What Does It Cost?

If you’ve been curious about living with a Model 3 or Model Y, you can now take one home for as little as $60 per day. The Cybertruck, perhaps the most talked-about of the bunch, is listed at $75 per day, while the more premium Model S and Model X command $90 per day.

Of course, no deal from Tesla would be complete without some important caveats. For starters, cars must be rented for a minimum of three days and a maximum of seven days.

Furthermore, while renters will be able to enjoy unlimited mileage, they will not be permitted to drive the Tesla out of the state. They’ll also be hit with a $30 fee if the car is returned with less than 50 percent charge.

There’s no word on whether the advertised rates include insurance, or if Tesla, like traditional car rental companies, will try to sting shoppers with exorbitant insurance fees.

What we do know is that only the upper-tier Premium trims are being offered. The entry-level Standard versions aren’t part of the deal, and neither are the high-performance Performance or Plaid variants.

Tesla will no doubt hope that by offering cheap rentals, it can convince interested shoppers to place an order. To help further convince them, they’ll receive a $250 credit if they place an order within seven days of the rental.