Tesla’s European Sales Face Significant Challenges
Tesla (TSLA) is experiencing a notable downturn in its European sales as of August, influenced by heightened competition and CEO Elon Musk’s political opinions. In France, registrations for Tesla vehicles decreased by 47.3% compared to August 2024, despite a slight overall increase of 2.2% in the car market.
The decline is even steeper in Sweden, where Tesla registrations have plummeted by over 84%. Denmark saw a reduction of 42%, while the Netherlands recorded a 50% drop. In contrast, only Spain and Norway reported an increase in sales for Tesla, although both markets saw Tesla outstripped by the Chinese automaker BYD (BYDDF).
The Role of EV Subsidies in Spain
In Spain, the government’s offering of EV subsidies up to €7,000 played a significant role in enabling Tesla’s 161% growth year-over-year. However, even with this boost, BYD’s sales surged by more than 400%, with the Chinese manufacturer selling 14,181 cars in Spain against Tesla’s 9,303.
Challenges Beyond Competition
Tesla’s struggle in Europe is exacerbated by more than just competition. The company’s brand reputation has suffered due to Elon Musk’s polarizing political views, which have reportedly discouraged many potential buyers. Ginny Buckley, CEO of Electrifying.com, noted that over half of the participants in a survey indicated they were less likely to purchase a Tesla because of Musk’s influence.
Additionally, significant price cuts on new Tesla vehicles since 2023 have led to a drastic depreciation in the value of used models. This shift has made the secondhand market more attractive, further impacting new car sales adversely.
Wall Street’s Perspective on Tesla Stock
Looking at Wall Street’s analysis, TSLA stock currently holds a Hold consensus rating, based on 13 Buys, 14 Holds, and eight Sells assigned in the past three months. The average price target for Tesla shares sits at $306.42, suggesting a potential downside risk of 8.2%.
