Tesla's electric vehicles are its bread and butter — but that could be changing. The Elon Musk-led company is experiencing increased sales pressure in the world's biggest car markets.
What's happening?
Reuters reported that Tesla is having trouble righting the ship amid a "sales skid" as competitors release new, improved EVs, frequently at lower price points than Tesla.
Despite Tesla's record-breaking third quarter — fueled by Americans taking advantage of federal EV tax credits before they expired Sept. 30 — Visible Alpha estimated the company's global vehicle deliveries to drop 7% this year after a 1% decline in 2024.
The situation appears to be most dire in Europe, where more than a dozen EV models sell for $30,000 or less. In October, the European Automobile Manufacturers' Association reported that Tesla sales declined 48.5% compared to the same month last year, per Reuters. In China, deliveries hit a three-year low, while sales dipped 8.4%. In the U.S., that drop hit 24%.
"The problem for Elon Musk is not just his own cars and the Chinese carmakers. The problem for Elon Musk is also that the Europeans have caught up," Ferdinand Dudenhoeffer, head of University of Duisburg-Essen think tank CAR, told Reuters.
Why is this important?
While Tesla pioneered the modern EV industry, it can struggle to move its offerings in price-sensitive markets. Ultimately, having a variety of EVs available at more accessible price points is a win for consumers on multiple levels.
Charging an EV is shockingly less expensive than filling up at the gas pump, especially if you power up at home. Qmerit offers free, instant quotes for Level 2 chargers. Over their lifecycles, EVs also account for significantly less air pollution associated with billions in health costs.
However, if Tesla's roller-coaster year stretches into 2026 and beyond, consumer confidence in EVs could take a hit, slowing adoption rates. Musk has gone all in on robotics and artificial intelligence as the future of the company — in fact, as Reuters reported, his $1 trillion pay package doesn't require a major uptick in sales for him to unlock a multibillion-dollar reward.
Yet early returns haven't exactly been inspiring. A history of delayed or broken promises, Robotaxi safety concerns, and a talent exodus — not only at Tesla but also at Musk's xAI — have made many wary of Musk's ability to deliver as planned, though shareholders were confident enough in his leadership to approve his unprecedented pay package.
What's being done about this?
Tesla released more affordable, stripped-down variants of the Model Y and 3 to bolster sales. While powering up at home is cheaper than relying on public charging stations, its Supercharger network remains top-of-the-class, with its vast network helping EV drivers on long road trips.
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Reuters also suggested that Tesla "could benefit as several legacy automakers dial back EV models and factory investments," including General Motors, Honda, and Ford.
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