Tesla has secured approval from regulators to sell its Model 3 cars in Europe, in a move that will bring it in direct competition with the likes of BMW, Volkswagen and Peugeot in their home market.

Dutch vehicle authority RDW approved Tesla's request to sell the most affordable of its electric cars on Monday, meaning that British customers can order the car from next month. Production of right hand driving vehicles, the standard in the UK, is not due to start until mid 2019.

The announcement comes days after chief executive Elon Musk issued a letter to all of his employees, describing 2018 as "the most challenging in Tesla's history".

In the same letter, Musk said he had "no choice" but to reduce full time employee headcount by 7pc and retain only the most critical temps and contractors.

"There isn't any other way," he said. Workers will now focus on producing a cheaper version of the Model 3 in an attempt to boost sales.

Shipments of Model 3 vehicles to Europe and Asia are expected to generate a profit for the company in future, Musk said.

Tesla's Model 3 is currently priced at over $35,000 (£27,200), has a range of 220 miles and a top speed of 130 mph. The model first went on sale at the end of 2018.