Two things happened this week that actually change something for European Tesla owners and buyers. France became the first EU government to publicly refuse the Dutch-led shortcut to continent-wide Full Self-Driving approval. And Tesla reported record revenue with the thinnest operating margin it has posted in years, which tells you where the company is spending its money and what it is willing to sacrifice to do it.
Everything else this week, the Summer Update, Grok going Europe-wide, the merger chatter, sits downstream of those two facts.
- France blocks the FSD fast track
- Where FSD actually stands in Europe
- Q2 2026: record revenue, collapsed margin
- The European sales picture underneath
- Giga Berlin: more profit, fewer cars
- What European cars actually got: Summer Update 2026.26
- Merger talk reached the earnings call
- What this means if you are ordering
- FAQ
France blocks the FSD fast track
On July 22, French transport minister Philippe Tabarot said France will not authorise Tesla's FSD Supervised in its current form. In his words, "while this system brings a number of technological advances, the safety tradeoffs are not yet sufficient to justify authorisation in its current form."
The objections are specific, not vague. French regulators flagged two things:
- Speeding. The system matches surrounding traffic flow, which in testing meant travelling above posted limits, including reported cases of roughly 70 km/h in a 50 km/h zone.
- Driver attention. France concluded the system does not guarantee an adequate level of driver attention in urban settings, specifically during lane changes, intersections and roundabouts.
Why this matters more than a single national "no": it is the first public rejection by an EU government of the Dutch-led plan to convert the Netherlands' national exemption into an approval that works across the bloc. France is not simply declining to opt in. It is arguing that the whole route is wrong, and that Europe needs a harmonised framework with unified test protocols before anyone signs off.
Elon Musk responded that "delaying the approval of FSD in France will cost lives." France said technical discussions with the Netherlands and other member states are continuing.
France is not alone, and that is the real story
Read on its own, France looks like one holdout. Put next to what has already happened in the committee, it looks like a pattern.
- Sweden got there first. The Swedish Transport Administration wrote to the TCMV on April 30 objecting to Tesla's Speed Offset feature, which lets the car travel above the posted limit. Sweden's position was blunt: allowing automated systems to "systematically exceed legal speed limits" risks "undermining both the legal framework and the expected safety benefits of vehicle automation," and if the capability stays, Sweden votes no.
- The June 30 committee meeting did not vote. The Dutch request was scheduled as a continuation of discussions rather than for final examination and vote, so the item passed without a decision.
- France and Sweden are objecting to the same thing. Both centre on speed. That matters because it is a design decision Tesla controls, not a national quirk it can wait out.
The threshold is the part most coverage skips. EU-wide approval needs a qualified majority: 15 of 27 member states representing at least 65% of the EU population. France and Sweden together are roughly a fifth of the EU population before anyone else joins them. Finland and Norway have raised comparable concerns about speed compliance and winter-road performance.
Where FSD actually stands in Europe
The practical map as of July 24, 2026:
| Country | Status | Route |
|---|---|---|
| Netherlands | Authorised | RDW type approval with Article 39 exemption, April 10, 2026 |
| Lithuania | Authorised | Recognition of the Dutch decision |
| Estonia | Authorised | Recognition of the Dutch decision |
| Denmark | Authorised | Recognition of the Dutch decision |
| Belgium | Authorised | Recognition of the Dutch decision |
| Italy | In process | Filed for recognition of the Dutch approval, July 13, 2026 |
| France | Opposed for now | Wants a harmonised EU framework first |
| Sweden | Opposed for now | Will vote no unless the Speed Offset feature is removed |
| Finland | Under review | Traficom weighing national recognition, possibly after the summer |
| Everywhere else in the EU | Not authorised | Awaiting the bloc-wide process |
Tesla's own Q2 numbers show the demand side is real where the software is legal. The company said customers in those five markets had driven more than 50 million kilometres on FSD Supervised as of July, and reported 1.48 million active FSD subscriptions globally, up 56% year over year. Tesla explicitly credited European approvals with lifting demand in the region.
The uncomfortable read: the software is now a genuine sales driver in five small-to-medium markets, and the two largest European markets by Tesla volume, France and Germany, still cannot use it. For background on how the approval mechanism works, see our FSD Europe approval explainer and when FSD reaches your country.
Q2 2026: record revenue, collapsed margin
Tesla reported Q2 2026 results on July 22. The headline was a record. The body was a squeeze.
| Metric | Q2 2026 | Change |
|---|---|---|
| Revenue | $28.24 billion | +26% year over year, a record |
| Deliveries | 480,126 | +25%, a Q2 record |
| Operating income | $398 million | -57% |
| Operating margin | 1.4% | down from 4.1% |
| GAAP net income | $1.11 billion | -5% |
| Non-GAAP EPS | $0.33 | vs roughly $0.53 expected |
| Capital expenditure | $5.79 billion | +142% |
| Free cash flow | -$1.09 billion | negative, from positive last quarter |
| Energy generation and storage revenue | $3.14 billion | +13% |
That is a company selling a quarter more cars than a year ago and keeping 1.4 cents of operating profit per revenue dollar. The capex line explains most of it: Tesla is spending heavily on AI compute, robotics and autonomy, and it is now doing so faster than the car business generates cash.
The market took the margin, not the revenue. TSLA closed at $319.69 on July 23, down 14.52% from the previous close of $374.01, with an intraday low 15.6% below that close. Against the 3.95 billion shares outstanding disclosed on the 10-Q cover, that removed roughly $215 billion of market value in one session. Several outlets published a figure near 12%, which reflected the price while they were writing rather than the closing move. We break the print down line by line, including the energy-margin collapse most coverage missed, in why TSLA fell 14.5% on record revenue. For the delivery quarter that preceded it, see our Q2 2026 deliveries and stock analysis.
The European sales picture underneath
Buried under the margin story is the fact that Europe is where Tesla's volume recovery is actually happening. ACEA data for June 2026, reported this week, shows:
- 52,563 Tesla registrations across the EU, EFTA and the UK in June, up 49.9% year over year.
- 170,351 registrations in the first half of 2026, up 54.6% on H1 2025.
- The wider market moved with it: 270,557 battery-electric cars registered in the EU in June, and a 20.7% BEV share of the EU market for H1, up from 15.6% a year earlier.
Keep the base effect in view. These are recoveries measured against a 2025 in which Tesla underperformed almost every carmaker in the EU. A 54.6% gain from a collapsed baseline is a real improvement and not the same thing as a new high. Our July Europe buyer check breaks the rebound down by country, including why Norway went the other way.
Giga Berlin: more profit, fewer cars
Tesla Manufacturing Brandenburg's 2025 annual accounts surfaced this week, and they are a useful reality check on European production. Net profit rose to €77.1 million from €56.8 million, while revenue fell to €7.1 billion from €7.7 billion. Output was roughly 202,000 vehicles, about 9,000 fewer than the prior year, at 54% capacity utilisation with around 11,000 staff.
Higher profit on lower revenue and lower volume means cost control, not demand strength. Tesla attributes part of the production dip to reconfiguring lines for new Model Y variants, and projects significantly higher output for 2026, targeting 7,500 vehicles per week. Whether Grünheide gets there is one of the better indicators to watch for European delivery times over the rest of the year.
What European cars actually got: Summer Update 2026.26
The 2026 Summer Update, build 2026.26, began rolling out this week with broader availability expected by the end of July. For European owners the headline item is that Grok is now available across all of Europe, up from the nine countries it launched in earlier this year.
- Grok vehicle commands: hands-free phone calls, music search and playback, climate adjustment, opening the glovebox.
- Preferred Routes: the routing engine learns roads you actually choose instead of defaulting to the theoretically fastest path.
- Automatic navigation suggestions for places you visit regularly, beyond the existing Home, Work and calendar prompts.
- App additions: custom vehicle wraps uploaded from the app, and setting a target arrival battery percentage before a trip.
- Parked Caraoke scoring saved to your profile, for the people who wanted that.
Musk indicated FSD voice controls for Grok could follow in the autumn. In Europe that capability is gated by the approval question above, not by the software. Our Grok in Europe guide tracks availability and language support.
Merger talk reached the earnings call
On the Q2 call, Oppenheimer's Colin Rusch asked directly whether Musk sees synergies from combining Tesla and SpaceX. Musk did not confirm anything, but he did not brush it off either: "there's more and more overlap. Especially with Terafab, that's really going to be a gigantic project." He then added that "we can't talk about combining companies and that kind of thing on a call. It's got to be done with the appropriate process."
Tesla general counsel Brandon Ehrhart added that Tesla "deepened our relationship through an investment and a framework agreement" with SpaceX earlier this year, covering projects including Terafab and Digital Optimus.
The filing that landed the next day is more concrete than either quote. Tesla's Q2 10-Q, filed July 23, discloses in Note 13 that Tesla invested $2.00 billion in SpaceX common stock in March 2026, an ownership interest of less than 1%. The accounting treatment is the interesting part: Tesla says it is "presumed to have significant influence over SpaceX" and therefore uses the equity method rather than treating it as a passive holding. The same note shows $318 million of Q2 revenue from SpaceX buying Tesla Megapacks, against related-party transactions that were "immaterial" a year earlier.
That is a company-disclosure-grade signal, not a deal. We have graded it and logged it in our Tesla-SpaceX Merger Watch, which stays at no announced transaction. For European owners the practical answer is unchanged: a change of shareholder would not change your car, your service, your Supercharger access or your app on day one.
What this means if you are ordering
- Do not buy FSD on the expectation of imminent national approval. Outside the five authorised countries, you are buying a capability with no confirmed delivery date, and France just made the timeline less predictable, not more.
- If you are in an authorised market, the software is real and in use. More than 50 million kilometres driven across those five countries is a meaningful sample, but it is still a supervised system with a driver responsible at all times.
- Delivery times are the thing to watch in Q3. Grünheide is running at 54% utilisation with a stated ramp target. Check the current estimate in your configurator rather than trusting a figure from earlier in the year. See our European delivery times tracker.
- Margin pressure is not a discount signal. A 1.4% operating margin gives Tesla less room to cut prices, not more. Do not wait for a price cut on the theory that the company needs volume.
- Verify referral status before you order, never after. Referral benefits vary by country, model and date, and they cannot be added retroactively. Check the current terms in the Tesla app or configurator.
FAQ
Can I use Tesla FSD in France in 2026?
No. As of July 24, 2026 FSD Supervised is authorised in five EU countries: the Netherlands, Lithuania, Estonia, Denmark and Belgium. France's transport minister publicly opposed authorising the system in its current form on July 22, citing speeding and driver-attention concerns, and France wants a harmonised EU framework rather than recognition of the Dutch exemption.
When will Tesla FSD be approved across the EU?
There is no officially confirmed date. Trade press reports an EU-level TCMV vote is due in October 2026, and the committee met on June 30 without voting. Approval needs a qualified majority of 15 of 27 member states representing at least 65% of the EU population, and France and Sweden have both objected on speed-compliance grounds, so the outcome is genuinely open.
Why did Tesla stock fall after record Q2 2026 revenue?
Revenue hit a record $28.24 billion, up 26%, but operating income fell 57% to $398 million and the operating margin compressed to 1.4%. Non-GAAP EPS of $0.33 missed the roughly $0.53 expected, and free cash flow turned negative at about $1.09 billion as capital expenditure rose 142% to $5.79 billion. The market priced the margin, not the revenue.
Is Grok available in my country now?
Tesla says Grok is available across all of Europe with the 2026 Summer Update, build 2026.26, up from the nine countries it launched in earlier this year. Rollout is over the air and staged, so availability depends on when your car receives 2026.26.
Sources
- Reuters: France opposes EU approval of Tesla's FSD driver assistance software for now
- Electrek: France won't approve Tesla FSD yet, wants EU-wide sign-off first
- Not a Tesla App: France says Tesla FSD isn't safe enough, requires changes
- electrive: Q2 financial results, Tesla posts record deliveries as profits come under pressure
- Electrek: Tesla releases Q2 2026 financial results, record revenue, big profit miss
- InsideEVs: Tesla Q2 2026 earnings, sales rise 25% as operating profit falls 57%
- Electrek: TSLA crashes 12% after the Q2 2026 earnings miss
- electrive: EU, 270,000 electric cars registered in June (ACEA data)
- ACEA: New car registrations, +5.7% in H1 2026, battery-electric 20.7% market share
- electrive: Tesla increases profit in Germany despite lower production
- Not a Tesla App: Tesla is expanding Grok to all of Europe and more of Asia
- Electrek: Tesla's 2026 Summer Update release notes
- Not a Tesla App: Tesla FSD reaches 1.48 million active subscriptions
- Electrek: Elon Musk hints at a Tesla-SpaceX merger on the earnings call
- Tesla Q2 2026 Form 10-Q, Note 13 Related Party Transactions (SEC EDGAR)
- Electrek: Sweden tells the EU to reject Tesla FSD unless speeding is removed
- Automotive World: Sweden tells EU to reject Tesla FSD over speed limit feature
- just-auto: Finland may approve Tesla FSD ahead of the EU vote