Tesla's tough start to 2025 has continued in Europe, as the company has seen ongoing slumping sales while one of its biggest challengers has made a surge.
According to CNBC, Tesla's sales in July were down 40% compared to July of 2024, registering just 8,837 new vehicles sold.
Making matters worse, one of the EV company's largest competitors, Chinese manufacturer BYD, extended its sales lead in July, posting 13,503 new registrations, a 225% jump from last July. Other companies like Renault, BMW, and Volkswagen also posted sales bumps in July.
This continues what has been a brutal year of sales in Europe for Tesla; the American EV maker has seen its share of the market continue to shrink, even as the number of EVs sold on the continent continues to grow.
This was always bound to happen to some extent given the major lead Tesla got out to in the electric vehicle world, but the automaker has surely experienced a faster drop of marker share than it expected and has pulled leasing options for the Model X and Model S in Europe earlier this year — a sign that those cars were struggling to sell.
The reasons for the dip are complicated. Some of the decline is likely due to CEO Elon Musk's association with far-right movements across Europe, which alienated some of the company's customer base, which had been across the political spectrum and if anything leaning left. The company's lack of new models is also likely an issue, according to Thomas Besson, head of automobile sector research at Kepler Cheuvreux, a financial services company in Europe.
"They talk about almost everything else but the car they're selling at a slower pace now because effectively, the age of their vehicle is much higher than the competition and the latest products have not been as successful as hoped, notably the Cybertruck," Besson told CNBC's "Squawk Box Europe" on Thursday.
Besson also noted that the company has been trying to "convince investors that Tesla is not really a car company" with a stronger focus on AI and robots in recent months.
BYD has been applying serious heat to Tesla and other manufacturers recently, opening showrooms across Europe and launching its cars at price points that are competitive with, or lower than, Tesla and other EV manufacturers.
It's unclear at this stage whether Tesla can rebound in Europe, but the signs continue to signal trouble. The good news is more and more car buyers are considering and buying hybrids and fully electric vehicles, which helps to reduce the world's long-term reliance on oil and gasoline, with MIT calculating that gas-powered cars are nearly twice as polluting as electric ones with all factors considered.
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