Tesla’s sales in Europe dropped by 40% in July, marking the seventh consecutive month of decline for the automaker. This downturn seems to arise from several factors, including brand damage, tepid reception for new models, and intense competition from Chinese manufacturers.
The European Association of Automobile Manufacturers (ACEA) reported that new registrations for Tesla vehicles fell to just 8,837 for July, a stark decrease from the previous year.
On the other hand, Chinese electric car maker BYD saw a remarkable increase, registering 13,503 new vehicles, which is a staggering 225% rise compared to the same month last year.
According to ACEA, the drop in Tesla’s sales can’t simply be attributed to a general downturn in the industry, as the overall battery-electric vehicle market in Europe experienced growth in July.
BYD managed to attract European customers by rapidly opening showrooms and introducing new models, while Tesla’s inventory seems to be stagnating.
During a recent discussion on CNBC’s “Squawk Box Europe,” Tesla executives highlighted that the focus has shifted towards artificial intelligence and robotics, but these areas are mostly seen as future prospects.
“Tesla talks about everything except for their current vehicle sales, which are lagging,” noted Kepler Cheuvreux’s head of automotive research. He pointed out that Tesla’s latest models aren’t performing as well as anticipated and are aging compared to competitors.
This situation has granted Chinese rivals the opportunity to gain more market share, reaching a remarkable share rate of over 5% in the first half of the year, according to Jato Dynamics.
Investors are now hoping for new model releases from Tesla that could spark a sales turnaround.
Earlier this year, Tesla indicated plans for more affordable electric vehicles intended for high-volume production in late 2025. However, the brand has faced challenges due to its connections with the Trump administration, which have led to various controversies.
In a more alarming trend, protests have erupted at Tesla showrooms around the country, with some incidents involving vandalism or destruction of vehicles.
In the second quarter, Tesla acknowledged a dip in car sales revenue, and Musk cautioned that the company might endure “several rough quarters” ahead.
