This is especially true given that Tesla experienced a 40% YOY drop in July sales in Europe. This is the seventh consecutive month of drop for the electric car giant. At the same time, the company struggles to keep its growing market share in a cutthroat competitive environment. Chinese EV brands such as BYD are booming. This latest downturn raises very real and credible concerns. How long can Tesla remain on top of the European market while avoiding major updates to its car?
The lack of new vehicle models has left Tesla vulnerable as traditional automakers such as Volkswagen, BMW, and Renault Group continue to gain traction, logging increases in new car registrations throughout July. Chinese brands held an all-time high market share of over 5% in the first half of the year. They are pushing hard to release new models and grow their market share in Europe.
Elon Musk, the then CEO of Tesla, understood what was in store. At the same time, he cautioned investors that the company will likely have a few difficult quarters ahead. Meanwhile, Tesla faces a host of existential challenges. While the firm is dealing with intense competition for both talent and business and reputational harm from Musk’s inflammatory comments and associations with the Trump administration. At the same time, the brand’s overall image is likely taking a hit as prospective buyers grow ever more cautious of a brand’s command.
In order to respond to increasing loss of sales and other growing competition, Tesla is hard at work on developing a less expensive electric vehicle. They’re targeting “volume production” in the second half of 2025. This plan is part of the country’s leading automaker’s attempt to appeal to more people. In doing so, they are reacting to the burgeoning interest in electric vehicles across the price spectrum.
Thomas Besson, head of automobile sector research at Kepler Cheuvreux, underscored the significance of convincing Americans that Tesla is headed in the right direction. He noted that while the company is attempting to “convince investors that Tesla is not really a car company,” it has been focusing on topics such as artificial intelligence, robotics, and autonomy instead of addressing its lagging sales performance.
“They talk about almost everything else but the car they’re selling at a slower pace now because effectively, the age of their vehicle is much higher than the competition and the latest products have not been as successful as hoped, notably the Cybertruck.” – Thomas Besson
Tesla’s numbers are falling off a cliff. Meanwhile, its competitors are absolutely crushing it taking advantage of the growing demand for electric vehicles. As the auto industry evolves rapidly with new entrants and innovative technologies, Tesla’s ability to adapt will determine whether it can reclaim its leading position or continue facing setbacks.