Tesla’s future in the European market is grim, according to recent data from the European Automobile Manufacturers Association.
The American electric vehicle (EV) company has seen its sales in Europe drop by almost half, according to CNBC, as its lightning-rod CEO, Elon Musk, warns that the struggling sales might continue into the near future.
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But Tesla isn’t the only automaker finding itself falling behind. International manufacturers are struggling against a surging Chinese EV market that benefits from state support, much greater technological integration and, most importantly, significantly lower prices.
How has China managed to flip the script in electric car manufacturing, and what is the long-term outlook for Western brands like Ford and Tesla?
Tesla registered just 8,837 new vehicles in Europe in July of this year — a 40% drop compared to the same period last year. Even more worrying? This marks Tesla’s seventh consecutive month of declining sales in a region where overall EV adoption is actually on the rise.
And there’s reason to believe the decline will persist — at least for the near future. Last month, Musk warned that the automaker “could have a few rough quarters” ahead.
Other international brands experienced a decline in European registrations in July, including Stellantis (the parent company of Jeep), Hyundai, Toyota, and Suzuki.
At the same time, Chinese automaker BYD is experiencing an explosion in popularity in European showrooms, with 13,503 new registrations in July — a massive 225% increase year-over-year. All told, Chinese EV manufacturers have a European market share of 5.9% – a record, according to JATO Dynamics.
Tesla is just one of the many EV automakers feeling the intense pressure from Chinese manufacturers. Ford CEO Jim Farley’s recent comments at the Aspen Ideas Festival described China’s rapid rise in the EV market as the “most humbling experience” of his career.
“Their cost, their quality of their vehicles is far superior to what I see in the West,” Farley said.
His candid comments presaged what may prove to be a seismic shift in the automotive world.
And the stakes couldn’t be higher. As Farley bluntly put it: “We are in a global competition with China, and it’s not just EVs. And if we lose this, we do not have a future.”
While Tesla, Ford, and GM’s electric vehicles typically start in the $40,000 to $60,000 range, Chinese manufacturers like BYD are producing models like the Seagull for under $10,000.
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Chinese EVs aren’t just cheaper — they’re often better equipped, with Chinese vehicles offering seamless tech integration.
“They have far superior in-vehicle technology. Huawei and Xiaomi are in every car,” Farley said. “You get in, you don’t have to pair your phone. Automatically, your whole digital life is mirrored in the car.”
US automakers are trying to catch up. Ford is developing a next-generation, affordable EV platform designed to match China’s costs, but it won’t be available until 2027 — practically a lifetime in tech years.
Tesla is also aiming to launch a $25,000 “Model 2,” but the timeline for that project remains uncertain. Until then, a major price gap persists.
US car buyers are unlikely to see new EVs priced under $20,000 on the market in the immediate future — but pressure is mounting.
The US government has imposed steep tariffs on Chinese electric vehicles, which may shield domestic automakers in the short term. But the policy also risks stymying innovation and frustrating consumers in the long term, should those low-cost alternatives fail to materialize.
If you’re in the market for an EV but don’t want to empty your retirement account to afford one, here are some tips to consider:
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Look out for EV incentives that can help offset the cost of US-made electric cars.
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Compare dealer financing offers, including no money down or 0% APR.
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Consider used EVs to save money.
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Opt for an EV with a lower range to help reduce the sticker price.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.