BMW has topped the European battery electric vehicle (BEV) market for the first time, surpassing U.S. automaker Tesla, according to market research firm JATO Dynamics. In July, BMW sold 14,869 BEV vehicles, about 300 more than Tesla.

This shift highlights the growing success of traditional automakers in the EV market, previously dominated by electric-only manufacturers, driven by government policies and brand loyalty.

Felipe Munoz, a Global Analyst at JATO Dynamics, noted that uncertainty around EV incentives and the low residual value of electric vehicles contributed to a drop in total EV sales. He pointed out that these factors are creating barriers for consumers considering EVs.

While Tesla remains the leading automaker globally, traditional brands like BMW and Volvo are making strides amid uncertainties about EV subsidies and incentives. Additionally, CEO Elon Musk’s controversial public image may be affecting Tesla’s reputation.

BMW experienced a 35% increase in sales last month compared to the previous year, while Tesla saw a 16% decrease in registrations. The report indicates that about 139,300 new electric cars were registered in July, a 6% decline from July 2023, and the market share for EVs fell to 13.5% from 14.6% a year earlier.