Tesla Reportedly Slashed Monthly Lease Fee in the UK Amid Tepid Sales

Tesla (NYSE: TSLA) has reportedly slashed the monthly lease fee in the UK as its sales in the country have plummeted. The Times reported that Tesla is offering up to a 40% discount to car leasing companies in the UK amid a lack of storage space nationwide for its cars.

Tesla Is Facing a Severe Slowdown in Sales

Tesla is facing a severe slowdown in sales in Europe. Data from the Society of Motor Manufacturers and Traders shows that Tesla’s UK new car sales fell by almost 60% year-over-year. Tesla has been losing market share, particularly to Chinese EV companies, which are expanding at its cost in Europe.

Data from the European Automobile Manufacturers Association shows that Tesla’s market share in Europe has fallen for six consecutive months. Things haven’t been too encouraging in China either, and data released by the  China Passenger Car Association showed that sales from Tesla’s China Gigafactory – which includes both domestic sales and exports – fell 8.4% YoY in July. While the company saw a slight uptick in sales in China in June, sales from the China Gigafactory fell in the previous six months of the year. In the first seven months of 2025, sales from Tesla’s China Gigafactory fell 13.7% YoY amid tepid demand in China as well as Europe.

Chinese Automakers Are Giving a Tough Fight to Tesla

Chinese automakers are giving a tough fight to Tesla. BYD surpassed Tesla’s total sales in 2022, even as the US EV giant retained the title of the biggest seller of NEVs. It hit yet another milestone when its 2024 revenues surpassed those of Tesla. BYD’s annual revenues rose 29% YoY to $107 billion last year, while Tesla’s revenues were around $97.7 billion. The steep rise in BYD’s sales was led by a record 4.27 million deliveries, which was well ahead of Tesla.

BYD has sold more NEVs than Tesla in the first half of 2025 on the back of strength in both Chinese and global markets. The Chinese EV giant looks set to snatch the title of biggest EV seller from Tesla this year as the latter continues to battle tepid sales, and expectations of a yearly rise in 2025 deliveries look bleak by the day.

Elon Musk Has Been All Praise for Chinese EV Companies

Chinese EV makers are challenging Western automakers in general with their competitively priced vehicles, and Tesla is no exception. Several automakers, including Tesla and Ford, have acknowledged the prowess of Chinese EV companies, which are offering competitively priced models with exciting features.

For instance, in 2023, Musk praised BYD and termed it “highly competitive.” Last year, during Tesla’s Q4 2023 earnings call, Musk said, “Frankly, I think, if there are no trade barriers established, they will pretty much demolish most other companies in the world.”

The billionaire added, “The Chinese car companies are the most competitive car companies in the world. So, I think they will have significant success outside of China depending on what kind of tariffs or trade barriers are established.”

TSLA’s Automotive Business Is Facing a Slowdown

While Musk has been trying to steer Tesla from an EV company to a tech giant focusing on artificial intelligence, robotics, and humanoids, the company’s core automotive business has been facing several challenges, with sales falling for the first time last year. The slowdown has only deepened in 2025, and Tesla’s deliveries fell in double digits in the first half of the year.

The Tesla CEO has warned of a few “rough quarters” ahead as the One Big Beautiful Bill Act does away with the EV tax credit, which could hurt EV sales. While the company’s US sales might get a boost in Q3 as buyers rush to claim the EV tax credit, its global sales could be subdued in the quarter, looking at the data from Europe and China.

Musk’s Politics Is Hurting Tesla

Along with the slowing growth in the EV industry and rising competition, Musk’s political activities are also hurting Tesla, particularly in the US and Europe. The Cybertruck is a case in point here, as the model’s unique shape made it the target of those protesting against Musk.

Musk’s embrace of right-wing parties in Europe has also alienated some buyers. In a related incident, earlier this year, 10 drivers in Paris filed a lawsuit against Tesla, alleging that the perception about its cars becoming political symbols “prevents them from fully enjoying their car.”

Patrick Klugman, one of the lawyers working on the case, told Agence France-Presse, “The situation is both unexpected and impossible for French Tesla owners.” He added, “We believe that Mr Musk owes these buyers the peaceful possession of the thing sold.”

Several Funds Have Shunned Tesla

Several funds and institutional investors have either stopped investing in Tesla or have significantly reduced their holdings for reasons mostly due to Musk’s public behavior and political involvement.

The company’s financial performance, intense competition in the electric vehicle market, and issues related to union rights have been among the other reasons why some institutions have shunned Tesla shares.

In March, Danish pension company Akademikir Pension also announced it would sell its stake in Tesla amid concerns about the company’s labour rights, lax corporate governance, and Musk’s behaviour.

Later in April, Swedish insurer Folksam also divested its $160 million stake in Tesla. “Unfortunately, no improvement has been seen and a decision has therefore been made to divest the holding,” said Marcus Blomberg, Folksam’s head of asset management and sustainability

In May, Pennsylvania’s Lehigh County Pension Board voted 4-2 to halt fresh purchases of Tesla shares, becoming the first known case of a public pension fund blocking investments in Elon Musk run company.

Swedish pension fund AP7 blacklisted Tesla in June and sold all its shares in citing labor rights violations by the company in the US.