Tesla’s Troubles: Sales Tumble in China & Europe

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Tesla’s Sales Slump: A Deeper Dive

Tesla is experiencing a significant downturn in sales across key global markets, specifically China and Europe. This decline raises concerns about the company’s growth trajectory and competitive positioning.

China: Local Competition Intensifies

In China, Tesla’s sales figures for April reveal a concerning trend. According to CNEVPOST and data from the China Passenger Car Association (CPCA), Tesla sold 58,459 vehicles, marking a 5.96% year-over-year decrease and a substantial 25.84% drop from March’s 78,828 units. Furthermore, total sales from January to April in China have fallen by 18.31% compared to the previous year, totaling 231,213 units.

This contrasts sharply with the performance of local electric vehicle (EV) manufacturers. Nio reported a 53% year-over-year increase, delivering 23,900 vehicles. Xpeng showcased even more impressive growth, with a 273% surge, delivering 35,045 vehicles, its second-best month ever. Li Auto also saw a substantial 32% annual increase, delivering 33,939 units. Xiaomi EV reported over 28,000 deliveries in April. These figures highlight the intensifying competition in the Chinese EV market, putting pressure on Tesla’s market share.

Europe: A Widespread Downturn

Tesla is also facing headwinds in Europe, with April sales collapsing across several major markets. Year-over-year declines exceeded 50% in France, the Netherlands, Sweden, Denmark, and the UK. Even in Germany, Europe’s largest car market, Tesla’s sales plummeted by 46% despite an overall surge in EV adoption, according to ARS Technica.

The UK presents a particularly stark example. While battery electric vehicle (BEV) registrations rose by 8.1%, Tesla’s sales plunged by 62%, registering only 512 vehicles out of over 24,000 BEVs sold. Only Italy and Norway showed any growth, underscoring how widespread Tesla’s European struggles have become.

Factors Contributing to the Decline

Several factors are contributing to Tesla’s sales slump:

• Increased Competition: Growing competition from both Chinese and European EV manufacturers is eroding Tesla’s market dominance.
• Aging Product Lineup: The company’s product offerings may be perceived as less innovative compared to newer models from competitors.
• Negative Public Sentiment: CEO Elon Musk’s political associations and public persona appear to be impacting consumer perception of the brand.

Analysts Weigh In

Gordon Johnson of GLJ Research suggests that Tesla is in “big trouble” regarding demand. He points out that even staunch Tesla supporters are acknowledging the challenges the company faces. The report suggests that Tesla’s high stock valuation is under threat due to deteriorating fundamentals, particularly declining car sales, which account for 86% of its revenue.

The report concludes that Tesla’s ability to rebound in key markets like China and Europe is crucial. Without a sales recovery, investor confidence will likely continue to decline, potentially leading to a substantial downward revaluation of the stock, especially as the hype surrounding events like the June 1 robotaxi announcement fades.

By Zerohedge.com