Tesla Is Flying in Europe, and We Aren't Talking About the Roadster -- 1 Big Concern Remains

Tesla's (NASDAQ: TSLA) recent Roadster demonstration was flying over cars. Whether you scoffed at the gimmick or simply enjoyed the wild spectacle, the company quietly recorded registrations flying higher in Europe. The latter is likely the more meaningful flying from Tesla, especially since it was its best month for Europe registrations ever.

While Tesla doesn't break out its European deliveries, we can use vehicle registrations as a proxy for sales and better understand what's happened. Hint: It's good news for Tesla, although there is one growing concern.

Image source: Tesla.

September registrations fly higher

Tesla registered a record 66,035 vehicles in Europe in September, breaking its previous record high of 60,934 in March 2023. Even that figure won't quite be as high as the final data, as Lithuania and Portugal have yet to report September registrations at the time of this writing. That's likely to add at least another 1,000 registrations.

Despite Tesla's vehicle lineup aging, the Model Y and Model 3 are proving to have staying power with consumers. In fact, Tesla's Model Y led the European market with nearly 41,000 registrations, up 55% from the prior year. Tesla's Model 3 actually checked in second with just over 25,050 registrations, but impressively, it more than doubled its September 2025 volume. It was only the second time ever that Tesla's Model Y and Model 3 were first and second in Europe's monthly registrations, the first time being in December 2022.

Those results are certainly something to cheer, especially as Tesla's global deliveries have faced increasing competition in recent years, but there are a couple of things to consider.

What's the downside?

It's pretty well-known that Tesla does a strong push for deliveries at the end of the quarter, and September certainly proved that once again. However, investors should note the wide range of registrations during the third quarter. The Model Y registered only 5,138 vehicles in Europe in July, before a sizable recovery in August and, as mentioned, took the top spot last month.

The big question facing investors -- we'll get to the big concern in a second -- is which end of the range will end up closer to long-term reality. It's uncertain because while Tesla made a push for quarter-end sales in September, it's also true that the automaker benefited from an influx of inventory from its Shanghai, China, factory. This has become an engine to feed multiple overseas markets, including Europe.

Tesla's exports out of China are especially helpful currently, as China's electric vehicle (EV) market is in the middle of a brutal price war with intensifying competition. Chinese automakers are designing, developing, and delivering new vehicles at a far faster rate than the global auto industry is accustomed to.

The problem

The concern facing Tesla investors -- despite a smart strategic move to export vehicles from China into a more profitable market in Europe -- is that Chinese automakers are following the exact same strategy. Amplifying the tension is that the Chinese are making noise quickly in Europe's EV market, and with hybrids that can dodge some additional tariffs that full EVs exported from China cannot.

That's set the stage for Chinese brands to continue undercutting the competition on price, and luring in European consumers at a rapid rate. Chinese vehicle registrations were up 104% in September compared with the prior year, with market share reaching 14.5%, the largest combined market share those brands have achieved.

The specific examples are eye-opening as well, with China's Leapmotor registrations soaring 324% in September and Chery, Xpeng, and Geely Group recording gains of 263%, 229%, and 151%, respectively. Non-Chinese brands with significant volume -- Tata with Land Rover and Mazda -- were the only ones to beat the European market in September, posting far more modest gains of 35% and 24%, respectively.

The flying Roadster might have hogged the world's attention and industry headlines, but Tesla's registrations in Europe reaching a record high last month will be far more meaningful if it can continue fending off aggressive Chinese brands and exporting from its Shanghai factory.

Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.