Tesla Feels The Chill In Europe As Q1 Sales Drop 37 Per Cent, While EV Market Grows
The slump is part of a broader downward trend, with Tesla experiencing four consecutive months of declining sales across several key European markets, data revealed.
Tesla continued to face stiff headwinds in the European electric vehicle (EV) market as the automaker grappled with a significant drop in regional sales. Data released on Friday revealed a dramatic 81 per cent year-on-year plunge in Sweden for April, marking the company's weakest monthly sales performance in the country since October 2022.
The slump is part of a broader downward trend, with Tesla experiencing four consecutive months of declining sales across several key European markets, reported Reuters.
In the first quarter of the year, the European market for fully electric cars grew by 28 per cent, but Tesla's regional sales took a sharp turn, falling by 37.2 per cent.
The decline wasn't limited to Sweden; the Netherlands saw a 73.8 per cent drop in April, with Portugal reporting a 33 per cent decrease, both steeper than previous months. Denmark and France followed suit, recording sales declines of 67.2 per cent and 59.4 per cent, respectively.
Pressure Mounts Despite Model Y Update and Incentives
Tesla is banking on a refreshed version of its Model Y to reignite interest among European buyers. Although the vehicle is now available for order across major markets like Germany, the UK, France, and Italy, deliveries aren’t expected to begin until June. Analysts believe it will take time to assess whether the update can meaningfully reverse the company’s sales trajectory.
In the meantime, Tesla has rolled out financial perks such as car loan discounts and incentives in countries including Norway, Sweden, Germany, Britain, and France to stimulate demand. However, increasing pressure from established automakers and aggressive new entrants from China continues to challenge the company’s market position.
“Tesla’s technological lead has largely been eroded with the current model lineup,” said Andy Leyland, co-founder of SC Insights. “Competition from both legacy auto and Chinese entrants will be weighing on sales.”
Meanwhile, the first-quarter financials painted a grim picture: Tesla's automotive revenue dropped by 20 per cent, while net profit tumbled 71 per cent, both falling short of analyst expectations.
The company’s European battery-electric market share also slipped—from 19.7 per cent to 8.8 per cent in the first quarter. Meanwhile, rivals like BYD and Xpeng expanded their EU presence, capturing 2.9 per cent and 1.2 per cent of the battery-electric segment, respectively.
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Political Fallout and Reputational Challenges
Beyond competitive and financial hurdles, Tesla is also contending with political and reputational challenges. CEO Elon Musk’s alignment with far-right political views has sparked backlash in Europe and the US, including vandalism at Tesla facilities. “The brand has taken a reputational hit here in Europe,” said Ginny Buckley, CEO of Electrifying.com.
A recent survey of 1,642 people conducted between March 24 and April 11 found that 59 per cent of respondents were less likely to purchase a Tesla due to Musk’s political stance.
Despite the turmoil, there were isolated pockets of growth. Tesla’s registrations increased in Norway and Italy by 11.8 per cent and 29.3 per cent, reaching 976 and 446 cars, respectively. In contrast, April sales figures showed Tesla sold only 203 vehicles in Sweden, 382 in the Netherlands, and 302 in Portugal.
As doubts mount over whether the revamped Model Y can revive Tesla’s European fortunes, industry observers caution that continued underperformance could derail the company’s full-year outlook.
“With production downtime over, its sales may return to grow alongside other EV makers, but each month of underperformance threatens the group’s full-year forecasts,” said Will Roberts of Rho Motion.
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