Tesla is taking it on the chin in Europe, with its market share falling in June for the sixth straight month. But there’s more to the story. New car sales in Europe were down just over 5% in June, according to the European Automobile Manufacturers Association, known at ACEA. CNBC reports the latest sales data from ACEA shows Tesla’s market share in the European Union, Britain, and the European Free Trade Association fell to 2.8% in June. In the same month last year, Tesla claimed a 3.4% market share in those areas.
Tesla delivered 34,781 cars in June — a 22.9% decline from the same month last year. The reasons for the decline are speculative. There are more electric car models for sale in Europe this year than last, many of them from Chinese manufacturers. In addition, the damage done to the Tesla brand by the outrageous actions of its CEO — which bordered on lunacy — has not been repaired and may never be repaired so long as he is the sole face of the company.
Even though Tesla has introduced a slightly refreshed version of the Model Y manufactured near Berlin in Germany and its Chinese-made Model 3, the cars are still fairly long in the tooth as automobiles go. “The updated Tesla Model Y has so far failed to provide the expected sales boost for the brand,” Felipe Munoz, global analyst at JATO Dynamics, said in a statement. “At the same time, competition from BYD and Volkswagen Group is making it harder for Tesla to maintain its leadership position.”
At the Tesla earnings call this week, Musk muttered something about how production of a cheaper car has already begun, but later on in the program admitted it was nothing more than a de-contented Model Y. Any talk of a less expensive Model 2 has now faded as people begin to realize that Musk apparently intends to keep humping the company’s two main models for the rest of this century.
It seems he has become bored with the car business and has other priorities, among them SpaceX, Starlink, The Boring Company, xAI, robotaxis, robots, the X antisocial media channel, Neuralink, starting a new political party, and procreating. That leaves very little time left for actually running a car company.
“We do see Tesla sales continuing to struggle across Europe. Even where sales have returned to growth, such as here in the UK, they are growing far more slowly than the overall EV market,” Ben Nelmes, founder of EV data analysis firm New AutoMotive, told CNBC by email. During an earnings call on July 23, Elon Musk warned that the company “could have a few rough quarters” ahead as it faces higher tariff costs and the expiration of federal EV tax credits in the US.
Nelmes said Tesla faces “significant headwinds” with the loss of income from sales of US regulatory credits. “I have no doubt the company will survive — but it is looking more likely to be a niche brand in a bigger electric car market. The company’s biggest hope is to do what it did best at first, which is to use new technologies to disrupt a market that is dominated by slow moving incumbents, either through electrification or through autonomous vehicle technology, or perhaps through something else entirely,” he said.
Auto Sales In Europe Sag
Tesla sales in June were disappointing, but the four best selling automakers in Europe all sold fewer cars last month. Volkswagen and Stellantis reported a year-on-year decrease in sales of 6.1 and 12.3% respectively, while Renault and Hyundai also saw declines in sales. The ACEA data for June showed 1.24 million new cars were sold throughout Europe in June — a 5.1% year-on-year decline.
European automakers are trying to come to terms with the market uncertainty created by the on again/off again tariffs emanating from Mar-A-Loco on the Potomac. They also are under pressure from Chinese brands. In other data published by JATO Dynamics last week, the market share of Chinese car brands in Europe almost doubled over the first half of the year, hitting a new record of 5.1%. BYD, Leapmotor, and Xpeng are among the Chinese car companies experiencing rapid growth in the European market.
Tesla Urges Action
During the Tesla conference call this week, Tesla chief financial officer Vaibhav Taneja suggested the company may not be able to fulfill all the orders from customers trying to get a car before the federal tax credits expire on September 30. “The ‘One Big, (beautiful) Bill’ has a lot of changes that would affect our business in the near term,” Taneja explained. “The first among those changes is the repeal of the IRA EV credit of $7,500 by the end of this quarter.”
According to Gizmodo, Taneja cautioned that Tesla has “limited supply of vehicles in the U.S this quarter” and that the company is already within the lead times for ordering more parts, which means its ability to build new cars to meet a last minute rush is severely constrained. “If you are in the U.S. and looking to buy a car, let’s roll now as we may not be able to guarantee delivery for orders placed in the later part of August and beyond,” he cautioned.
Tesla has rolled out a number of carrots in the form of sales incentives to motivate buyers. Those incentives cost money, however, and are not guaranteed to remain available. “We have rolled out all our planned incentives already and will start paring them back as we start to sell,” Taneja said.
Buyers who have been holding off buying in hopes that a new lower priced model is coming could be out of luck. Taneja confirmed that the company is prioritizing the production of its current, more expensive models to maximize sales before the tax credit disappears. As a result, the rollout of the more affordable car will be delayed.
“We started the production of the lower-cost model as planned in the first half of 2025,” he said. “However, given our focus on building and delivering as many vehicles as possible… before the EV credit expires and the additional complexity of ramping a new product, the ramp will happen next quarter slower than initially expected.”
The message is crystal clear — act now or be kicking yourself in the future for waiting so long. It’s the oldest sales trick in the book, but that doesn’t mean the urgency is not real. On October 1, the cost of a new Tesla will increase substantially. Will it go up $7500? We just don’t know, but we do know it won’t be the same price as it is today. Carpe diem.
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