Refreshed Tesla Model Y Is A Dud In Europe As April Sales Fall 49%

Good morning! It’s Tuesday, May 27th 2025, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. This is where you’ll find the most important stories that are shaping the way Americans drive and get around.

In this morning’s edition, we’re looking at Tesla’s turmoil in Europe and where Toyota is planning to build the GR Corolla to help cut down wait times. We’re also talking about the penalties a handful of former Volkswagen managers are getting because of Dieselgate as well as Volvo’s plans to cut jobs.

I hope you all had a nice long weekend. It’s back to business now.

Tesla’s European sales fell 49% in April compared to the same time year earlier, and that happened despite the fact that the overall battery-electric vehicle market rose 27.8% year-over-year. As it turns out, the Model Y’s crappy-at-best redesign hasn’t been enough to win back buyers who are tired of CEO Elon Musk’s antics.

It’s the fourth straight month of losses for Tesla in Europe, causing its market share to dip to just 0.7% from the 1.3% it was a year ago. Aside from Elon’s cratering public image, Tesla has also been hurt by the fact it has really stiff competition from automakers across the globe now. From Reuters:

April sales in the European Union, Britain and the European Free Trade Association fell to 1.07 million cars, following 2.8% growth in March, the ACEA data showed.

Registrations at Chinese state-owned SAIC Motor and Japan’s Mitsubishi rose 24.5% and 22.1% respectively, while they fell 24.5% at Japan’s Mazda.

Electrified European sales — including full-on EVs, hybrids and plug-in hybrids — accounted for 59.2% of passenger car registrations in April of this year. That’s up from 47.7% last year, a jump that seems to be happening for everybody but Tesla. We’ll see if Musk’s promises to step back from such a visible role in the Trump administration will do anything to change buyers’ minds, but after a mild update to a five-year-old electric crossover that only made it look worse, I sort of doubt it. 

Toyota is moving some production of the GR Corolla to Britain, and it’s planning to spend about $56 million on a dedicated line at its factory to build exports specifically for North America. By shifting production from Japan, the world’s largest automaker hopes to utilize excess capacity at a factory in Great Britain to help cut delivery wait times for the car. Crucially, sources who spoke with Reuters say this move has nothing to do with President Trump’s tariffs.

Right now, Toyota produces the GR Corolla in Japan for the Japanese market, and for export to North America and other markets. However, it has had trouble keeping up with North American demand as buyers flock to Toyota’s sub-$40k turbocharged hot hatch. From Reuters:

It will set up a production line at the Burnaston plant in Derbyshire and invest around 8 billion yen ($56 million) to produce 10,000 cars annually for export to North America from the middle of 2026, according to the people.

Burnaston began operations in 1992 and possesses advanced production technology. It has suffered a decline in production since Brexit, said the people. The plant already produces the Corolla GR’s base model, the Corolla hatchback, making it a natural choice, one of the people said.

Engineers will be temporarily dispatched from Japan to share production technology and other expertise, the people said.

In 2024, Toyota built about 8,000 GR Corollas on a dedicated line at its Motomachi Plant in Toyota City, Japan. Production is already at full capacity there, so now it’s time to expand. After production for North America-destined cars is transferred to Britain, the Motomachi facility will continue to produce vehicles for Japan and other overseas markets. 

Four former Volkswagen bosses have been convicted for their roles in the automaker’s Dieselgate scandal that rocked the global automotive industry nearly a decade ago. The emissions cheating scheme caused $2.4 billion in damages to drivers. 

These verdicts are the first in a criminal probe targeting senior staff at VW. The men were charged in 2019 for installing software that would manipulate emissions software on over 9 million vehicles sold in Europe and the U.S. From Bloomberg:

Jens Hadler, who led diesel-engine development from 2007 to 2011, was sentenced to 4 1/2 years in prison over the sale of more than 2 million affected vehicles. Former top engineer Hanno Jelden received 2 years and 7 months for aggravated fraud linked to the sale of nearly 3 million cars.

After a four-year trial, the Braunschweig Regional Court on Monday also handed former executive Heinz-Jakob Neusser a suspended sentence of 1 year and 3 months for his role in the emissions-cheating scheme, which began after it was discovered that vehicles were fitted with software to sidestep pollution rules.

Another lower-ranking manager who can only be identified as Thorsten D. got a suspended sentence of 1 year and 10 months. All had sought acquittals.

[…]

The core of the allegations was that cars were equipped with so-called defeat devices leading to two different sets of emissions, depending in whether the vehicles were tested in the lab or used on the streets, Presiding Judge Christian Schütz said when delivering the verdict. On the streets, in a “real drive” scenario, emissions of toxic nitrogen oxides were much higher than during testing, he said.

All the men committed aggravated fraud by participating in a group whose aim was to deceive customers, according to Bloomberg. The key decision was taken at a meeting in 2006 when three men — including Jelden — decided to implement the rigging software. All of their sentences were reduced because of how long the protection took. The judge also said that these guys weren’t the only ones responsible for Dieselgate, and many others at VW participated. 

So far, Dieselgate has cost VW over €33 billion. That figure includes hefty sanctions that were put in place as part of a deal with authorities in the U.S. It’s still facing civil litigation in Germany which includes a €9 billion investor class action.

Volvo says it has to lay off about 3,000 employees as part of a cost-cutting measure, representing a nearly 15% cut to the automaker’s white-collar workforce. It’s making this move due to higher costs, a slowdown in electric vehicle demand, and trade uncertainty brought about by Trump’s tariffs. 

Every facet of Volvo’s operation will be touched by some layoffs, but the vast majority will happen in Gothenburg, Sweden — Volvo’s global headquarters. From Reuters:

CEO Hakan Samuelsson, who was recently brought back to the role after heading the company for a decade until 2022, unveiled a programme in April to slash costs by 18 billion Swedish crowns ($1.9 billion), including a substantial cut to its white-collar staff, who make up 40% of its workforce.

“It’s white collar in almost all areas, including R&D, communication, human resources,” Samuelsson told Reuters on Friday, “So it’s everywhere, and it’s a considerable reduction.”

“I think it will be very healthy, and will save us money and give space for people to (take on) bigger responsibilities.”

Because Volvo builds most of its cars in China and Europe, it is uniquely exposed to Trump’s tariffs on vehicles that come from the EU and China. Recently, the company said it could become impossible to export its most affordable cars — like the excellent EX30 — to the U.S. 

Late last week, Trump threatened to impose a 50% tariff on imports from Europe starting on June 1. Of course, he backed down from those threats a few days later, saying they’d now go into effect on July 9. Who the hell knows if that’ll actually happen, though?

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