Tesla sales have fallen by 40% in Europe in July as compared to the month before last year, and this is the seventh straight month of poor performance in a part of the world where the total uptake of electric vehicles is on the increase. This is a tragic decline when the Chinese competitor BYD is enjoying a rocket ship growth, with more than threefold growth in registrations, indicating that the Elon Musk-led electric vehicle empire is facing serious competitive challenges throughout the European markets.
Tesla is languishing, and BYD is skyrocketing
According to The Guardian, Tesla sales in Europe declined by 40 percent in July compared to the same time a year ago as electric car maker Elon Musk confronts a stiffening competition with his Chinese rival BYD. The European Automobile Manufacturers Association (ACEA) reported 8,837 sales of Tesla cars in the EU, the European Free Trade Association, and the UK last month.
BYD has increased its car registrations in Europe by 13,503 in October, against 4,151 in October the previous year. BYD’s market share is currently 1.2 percent, ACEA found, and Tesla is still at 0.8 percent. Chinese automobile brands with relatively low models have been aggressively expanding in Europe.
Chinese manufacturers acquire a large market share
This was the first spring that BYD sold more models in Europe than Tesla, according to a report by the market research firm JATO Dynamics. However, according to JATO Dynamics, Chinese EV manufacturers have reached an unprecedented share of 5.9% in the European market, which indicates their fast growth within the traditional automotive markets.
Tesla reported only 8,837 new vehicles in Europe in July this year, 40 per cent lower than it was the same month a year ago, based on Yahoo Finance. Worse still, this is the seventh month in a row of falling sales at Tesla in an area where the general uptake of EVs is steadily increasing.
Ford CEO threatens Chinese hegemony
Recent remarks by Ford CEO Jim Farley at the Aspen Ideas Festival characterized the fast development of the EV market in China as the most humbling experience of his career. In their prices, as well as in the manufacturing of their cars, their prices, their quality of their cars is way ahead of what I observe in the West, said Farley, which could be the beginning of a tectonic plate in the motor industry.
The Chinese have an advantage in technology integration.
Chinese EVs don’t merely cost less; they can be more highly armed, and Chinese vehicles have smooth tech integration. Their in-vehicle technology is much better. Huawei and Xiaomi are everywhere in a car,” Farley said. You just get in, you do not need to pair your phone. Your entire digitized life is reflected in the car automatically.
Tesla is also considering launching a 25000 (Model 2), but this project is not yet set in stone. Up to that point, there is still a significant price disparity between Western and Chinese electric cars, and this poses serious competitive risks to the incumbent. And there is cause to think the fall will continue–at least in the immediate present. Last month, Musk had cautioned that Tesla would have a few dusty quarters ahead. He noted that the market conditions Tesla would face in Europe are challenging.
The fact that Tesla has seen its sales in Europe drop dramatically is indicative of even more fundamental issues with Western car manufacturers as Chinese ones capitalize on the better technology integration, much lower prices, and aggressive growth strategies. This change of attitude is a core trend in the setting of electric cars, and the dealers available are not coping with the Chinese innovation and ability to set prices.