Tesla Hit With Fresh Setback in Europe as Turkey Hikes EV Tax

Tesla Inc.’s efforts to mitigate slumping European sales with gains in Turkey may be at risk after a surprise tax hike in one of the automaker’s fastest-growing markets.

Turkey has raised the lowest tier of its special consumption tax for electric vehicles — which includes Tesla’s top-selling Model Y — to 25% from 10%, according to a presidential decree published in the country’s Official Gazette.

The move adds to challenges facing Tesla CEO Elon Musk, who warned of difficult quarters over the next year or more as the company contends with the phase-out of US EV subsidies and ...