Europe turns on Elon Musk and Tesla as new car sales flatline. What's behind the sales plunge?
Tesla sales decline in Britain, Germany, and several other major European markets. Why are Europeans giving Tesla the cold shoulder?
- Tesla sales are down in eight out of the 10 largest EV markets in Europe.
- Stiff competition from BYD, Geely, and other Chinese EV companies partly to blame.
- Growing anti-Musk/Tesla sentiment related to role in U.S. administration also to blame for brand sales woes.
Tesla, Inc. is having a rollercoaster of a year in America, leaving investors unsure about the road ahead. The U.S. isn't the only market that the American electric vehicle manufacturer is struggling in.
The company's new car sales plunged to their lowest in over two years in Britain and Germany, Reuters reported May 6. Sales dropped 62% and 46% year-over-year respectively, despite demand for EVs increasing in both countries, according to Reuters.
Tesla shares were down 2.66% as of noon May 6 in the wake of reports detailing the drop in sales. The company's share price fell by 41.50% from $379.28 on January 2 to a yearly low of $221.86 on April 8. Tesla's share price has been ravaged by increased competition in the EV space and reactions to Elon Musk's political activities as Senior Advisor to the President of the United States.
Here's what to know.
Is Europe turning on Tesla?
Earlier this year, The Guardian reported that EV sales in Great Britain have increased because of rules forcing automakers to sell more every year to cut carbon dioxide emissions, hitting an sales record in 2024.
Stellar European Tesla sales were a byproduct of the global push for the auto industry to go green, until now. It's no secret that Americans are beginning to turn their back on Tesla vehicles and the company's eccentric CEO, Elon Musk. Have the same negative sentiments become a pandemic of sorts, transforming global perceptions of the brand?
Tesla sales fell to multi-year lows in several other European markets, including Sweden (80%) and the Netherlands (74%), even as the company launches the redesigned Model Y, according to Reuters.
Why Tesla sales may be falling in Europe
"This could partly be attributed to political tensions tied to Elon Musk's divisive role in the Trump administration and advocacy for right-wing European parties," Business Insider reported May 5, citing the "Tesla Takedown" movement that emerged in response to Musk's government role and his comments on European politics.
The public's growing outrage at the actions of Musk and the current American administration is well-documented.
On the other hand, the political escapades on Tesla's CEO are only half of the equation. The American automaker experienced plenty of success early on in European markets, but it's far from the only player.
Statista asserts that six out of the 10 global best-selling EV brands were from China in 2023. The global domination of Chinese EV brands like BYD, MG, Xpeng, and Nio has only become more prevalent in recent years. Renowned investors Warren Buffet and Charlie Munger have both sung the praises of BYD, taking a huge stake in the company back in 2008.
What are the most popular electric vehicles in the world?
Tesla had a strong claim to the title of the world's most popular automaker in 2024 (not just for EVs), but Chinese electric vehicles are spreading like wildfire. A global sales report by Cleantechnica.com, an authority in electric vehicle statistics, calls the Tesla Model Y the most popular electric vehicle in the world as of January.
The Model Y is closely followed by the BYD Song and Seal U. The Geely Geome Xingyuan, Wuling HongGuang Mini EV, and Xiaomi SU7 are also listed as best-selling models. These names may not be familiar to you as an American, but they are widely popular in other markets. BYD, Geely, and Wuling will sell thousands of units in Europe in 2025. This isn't great news for America, as we lose the race to create the most popular electric vehicle nameplate.
Tesla's fall from grace leaves room for Chinese EVs to devour market share and dominate the U.S. in the EV space. Will Chinese EVs officially dethrone Tesla and the Model Y in 2025, or does America's current most controversial car brand still have a chance to cling to glory?