Tesla slashes UK leasing prices as July sales plunge 60%

Tesla leasing prices in the UK have plunged, with costs now less than half of what they were a year ago, as the carmaker faces slowing sales and mounting competition. Analysts say the dramatic cuts have sparked debate about Tesla’s standing in Europe.

Drivers can now lease a Tesla Model 3 for just £252 per month, down from £600–£700 last year. The larger Model Y has also seen steep reductions, with monthly costs dropping from about £700 to between £377 and £400.

According to The Times, automakers offer leasing firms discounts of up to 40%, provided the cars are sold within three months. Those savings are being passed directly to motorists through lower payments.

Tesla sales plunge 60% in UK

Tesla’s practical problem of overcrowded stockyards and excess supply justifies the price reductions. The US carmaker is running out of space to park all the unsold cars in Britain. To keep cars moving, dealers and leasing firms have been pushed to swallow more stock, slashing full price discounts heavily.

One of the most dramatic has been in the UK, where company sales have gone off a cliff. Revealed in fresh data published by the Society of Motor Manufacturers and Traders (SMMT), the company only registered 987 new cars in July 2025. The year before, it sold 2,462 units. Thus, the year-on-year decrease is 60%.

The broader car market has been pressured, too, though not quite as badly. Across the board, total UK registrations dipped by around 5% last month. Tesla’s fall does not simply reflect weaker consumer spending — it is about brand-specific issues causing the automaker to fall behind.

Several factors, according to industry analysts, have contributed to the decline. After years of rapid growth, the EV maker is now seeing waning demand for its core models—the Model 3 and Model Y. With the market flooded by new crossovers and SUVs, many potential Tesla buyers are turning to alternatives that offer lower prices, longer range, or more modern designs.

On the other hand, Tesla is also dealing with an increase in inventories. Vehicles reportedly are piling up in lots, driving the firm and its lessors to slash prices to make room on property. Leasing firms are being offered discounts as high as 40%, a move that some analysts caution may damage the brand’s premium status.

It has also taken on the brewing European battle. Chinese competitor BYD has also announced a charge with its bargain-priced EVs like the Atto 3 and Seal, as German marques such as Volkswagen, BMW, and Mercedes-Benz continue to bolster their electric ranges. 

Tesla, meanwhile, is set to deliver its 200 mph models to Europe in 2022, priced to attract EV enthusiasts who have long anticipated the arrival of one of the world’s most influential charging network providers.

UK EV market rises as Tesla loses ground to budget-friendly BYD models

These struggles may have tarnished some of Tesla’s lustre, but the UK electric vehicle (EV) market is standing firm and girding its loins in preparation for exponential growth in Britain. As a result, it now expects the BEEV portion of new car registrations in 2025 to be 23.8%, slightly higher than its previous 23.5% forecast for the same year.

However, even as the EV segment grows, Tesla is losing share against competitors. UK BYD Car Sales Surge For July meant BYD registered about 3,184 vehicles — more than three times the number that Tesla was thought to have registered in the same month.

The increase in BYD also reflects a new landscape in buyer choices for more budget-friendly models. The company says that aggressive pricing on Atto 3 and Seal models gives cautious buyers alternatives to Tesla.

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