Australia hands Tesla lifeline with May sales surge, struggles persist elsewhere

Australia just gave Tesla something it hasn’t had in a while—relief. The company said on Tuesday that it sold 3,897 electric vehicles in Australia in May 2025, its best monthly performance in nearly a year, according to data reported by CNBC.

That came after an embarrassing 500-car collapse in April, which was its lowest-performing month in the country this year. This sudden spike, fueled almost entirely by the Model Y, was a 675% leap from the month before, though overall year-over-year growth for May sat at just 9.3%.

The Model Y exploded. Tesla confirmed sales of the compact SUV jumped 122.5% year-over-year, while the Model 3 continued to tank. And while this rebound looks good in isolation, total year-to-date sales in Australia are still down 48.2% compared to the same stretch last year.

🚨BREAKING: TESLA SALES SURGE IN 🇦🇺AUSTRALIA WITH RECORD MODEL Y DEMAND $TSLA

• Tesla reports 3,897 vehicle deliveries in May 2025, highest in nearly 12 months
• Updated Model Y drives rebound with 3,580 units sold, up 122.5% from May 2024
• Total deliveries up 9.3%… pic.twitter.com/zEwXSFeEFi

— Tesla Archive (@tesla_archive) June 3, 2025

The numbers were released by the Australian Electric Vehicle Council, which became the only public provider of Tesla and Polestar data in the country after both automakers ditched the Federal Chamber of Automotive Industries (FCAI) last year.

Model Y surge lifts May, but global pressure continues

Liz Lee, associate director at Counterpoint Research, told CNBC the company’s May results in Australia were mostly about one thing, “strong demand for the updated Model Y.” But she added that the boost “does not yet signal a broader global recovery,” and pointed to Tesla’s overall sales being down 13% in Q1 worldwide. 

Australia’s rebound looks good on a spreadsheet, but globally, the company’s still under pressure. That pressure starts at the top. CEO Elon Musk has been a public relations disaster lately, and it’s hitting Tesla hard.

Before May, Tesla was struggling to sell cars in Australia amid reports of vandalism and protests tied to Elon’s support for Donald Trump and for his backing of far-right parties in Europe.

That political heat has stuck to the brand, especially in markets like Spain, Portugal, Denmark, and Sweden, where sales dropped sharply in May, based on figures shared this week by European industry groups.

The only exceptions were Norway, where Model Y sales climbed 213% year-over-year, and Turkey, where Tesla sold a record 1,545 units last month. Those jumps followed a major change in Tesla’s executive narrative.

At a press conference last week, Trump announced that Elon would be stepping away from his formal government role. He’s still an advisor, but Dan Ives of Wedbush said in a note that Elon’s political chapter “is essentially over” and that turning his attention back to Tesla is “the best possible news Tesla investors could have heard.”

Dan said the pivot came at the right time, as Tesla’s gearing up for its long-delayed robotaxi launch later this month. Elon recently confirmed that driverless Model Ys are already being tested, and the launch will mark a major test for the brand’s future.

Tesla’s EV lead in Australia faces pressure from China’s BYD

Tesla’s fight is competitive. The company is under real pressure from Chinese EV makers, especially BYD. In April, BYD beat Tesla in European battery EV sales for the first time, based on numbers from JATO Dynamics, which called it a “watershed moment.”

BYD has also overtaken Tesla in global annual revenue, after rolling out aggressive discount campaigns across key markets. But in May, Tesla clawed back some ground. It outpaced BYD in Australia, with 3,897 Tesla sales compared to 3,225 for BYD.

Still, the gap is narrow, and the competition is heating up. Tesla only sells fully electric vehicles, while BYD’s product mix includes hybrids, which still sell strong in markets like Australia where charging stations are lacking in many areas.

Recent figures sent to CNBC by the FCAI show hybrid sales in Australia were up 6% year-over-year, while plug-in hybrids jumped 118% in May. FCAI chief executive Tony Weber said Australians are turning to hybrids because they want lower emissions without worrying about limited range, which remains a big issue for full EVs across the country.

That puts pressure on Tesla to adapt, especially with its year-to-date global performance still trailing. Liz from Counterpoint said the company should expand into markets like India, Southeast Asia, and Latin America, where governments are building EV infrastructure and offering purchase incentives.

On the financial side, Tesla’s stock rose 0.5% on Tuesday, but the company is still down 15% year-to-date. Even with Australia throwing it a lifeline, the company has a long way to go to recover globally.

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