Tesla’s European fortunes take a hit as Chinese rivals gain ground

The challenges facing Tesla Inc. appear to be mounting as the electric vehicle pioneer continues to witness a slide in its European sales figures. This downturn in the region, confirmed by recent data for November, comes at a difficult time for the manufacturer, which is also grappling with a lacklustre performance in the United States. According to figures released by the European Automobile Manufacturers’ Association (ACEA), Tesla registered 22,801 units across the continent last month, representing an 11.8 per cent drop compared to the 25,840 vehicles sold during the same period last year.

Looking at the broader picture for 2024, the situation seems even more precarious. Between January and November, Tesla’s total sales reached 203,382 units, a significant 28 per cent decrease from the 282,335 vehicles delivered in the previous year. To combat this decline, the company is reportedly preparing to introduce the Model Y L—a variant previously exclusive to the Chinese market—to European showrooms. Furthermore, there are ongoing efforts to roll out the Full Self-Driving (FSD) system across the region, as the firm seeks to regain its competitive edge through technological appeal.

The rapid ascent of BYD in the West

While Tesla struggles to maintain its footing, BYD Co. Ltd. is moving in the opposite direction with remarkable speed. The Chinese automaker has maintained an aggressive growth trajectory in Europe, seeing its November sales soar by 221.8 per cent to reach 21,133 vehicles. For context, the company sold just 6,568 units in November of the prior year. This trend is mirrored in their year-to-date performance, where sales have surged by 276 per cent, totalling nearly 160,000 units.

Interestingly, the United Kingdom has emerged as a cornerstone of BYD’s international strategy. In September alone, the company shifted over 11,000 vehicles in the UK, making it their largest market outside of China. Part of their future roadmap involves the introduction of a Japanese-style “kei car” to European streets, provided they can navigate the necessary regulatory hurdles for the E-car category. This comes amidst a broader shift in the European market, where electrified vehicles—including hybrids and plug-in models—now account for almost 63 per cent of total sales, with traditional hybrids leading the charge.

Internal manoeuvres to bolster Cybertruck figures

Beyond the European sales data, Tesla is facing a different kind of crisis regarding its much-hyped Cybertruck. What was originally envisioned as a high-margin flagship model has, by many accounts, failed to meet the ambitious commercial expectations set by the company. The discrepancy between the initial promise and current reality is stark; while the vehicle was famously announced with a starting price of roughly $39,900, it is currently being sold in versions ranging from $80,000 to $115,000.

Reports from industry sources, including Electrek, suggest that the “bubble” surrounding the pick-up has effectively burst. After an initial period of high demand where second-hand prices skyrocketed, Tesla now seems to be struggling to move its inventory to the general public. In a move that has raised eyebrows across the industry, Elon Musk’s other ventures, SpaceX and xAI, have stepped in to procure the vehicles. Internal sources indicate that these companies have already purchased approximately 1,000 units, with the potential for that number to double.

This internal procurement represents a minimum spend of $80 million, providing a much-needed, if somewhat artificial, boost to Tesla’s balance sheet. While these purchases might be justified as necessary equipment for Musk’s other enterprises—potentially benefiting from tax subsidies in the process—the optics suggest a desperate attempt to fill the gap left by a cooling consumer market.