Auto giant Tesla is losing its dominance in the electric vehicle segment in the European market due to stiff competition from other major car manufacturers.

The American auto giant was comfortably topping the European EV charts in 2019. It delivered more than 109,000 vehicles that year, making up 31% of the region’s battery electric-vehicle market.

However, tide turned in 2020, with Tesla dropping behind both the brands of Volkswagen Group, which had 24% market share, and the Renault–Nissan–Mitsubishi Alliance, with 19% market share.

In 2020, it delivered nearly 98,000 vehicles and made up just 13% of the European market.

Schmidt termed the cause of decline was due to introduction of emissions targets, and the specter of massive fines.

These facts forces other manufacturers to move towards environmental friendly electric vehicles, which has accelerated European car makers’ battle against Tesla for dominance.

“With 2021 getting even tougher — thanks to the phase-in year ending — Tesla will come under even more intense competition,” Schmidt said. “Come 2025 when the targets increase again, Tesla will certainly be playing against fully-fit opponents and will potentially struggle.”

However, Schmidt does note in his market outlook for 2021 that the opening of Tesla’s factory in Germany, expected to start production in the second half, is likely to double regional volumes next.

Europe has become the world’s largest market for electric vehicles by overtaking China in 2020.

The registrations of new electric vehicles topped 1.33 million in the key European markets last year, compared with 1.25 million in China, according to a report based on public data by automotive analyst Matthias Schmidt.

The 18 markets include the European Union states — minus 13 countries in Central and Eastern Europe — as well as the U.K., Norway, Iceland, and Switzerland.