Tesla’s future in the European market is grim, according to recent data from the European Automobile Manufacturers Association.
The American electric vehicle (EV) company has seen its sales in Europe drop by almost half, according to CNBC, as its lightning-rod CEO, Elon Musk, warns that the struggling sales might continue into the near future.
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But Tesla isn’t the only automaker finding itself falling behind. International manufacturers are struggling against a surging Chinese EV market that benefits from state support, much greater technological integration and, most importantly, significantly lower prices.
How has China managed to flip the script in electric car manufacturing, and what is the long-term outlook for Western brands like Ford and Tesla?
Tesla registered just 8,837 new vehicles in Europe in July of this year — a 40% drop compared to the same period last year. Even more worrying? This marks Tesla’s seventh consecutive month of declining sales in a region where overall EV adoption is actually on the rise.
And there’s reason to believe the decline will persist — at least for the near future. Last month, Musk warned that the automaker “could have a few rough quarters” ahead.
Other international brands experienced a decline in European registrations in July, including Stellantis (the parent company of Jeep), Hyundai, Toyota, and Suzuki.
At the same time, Chinese automaker BYD is experiencing an explosion in popularity in European showrooms, with 13,503 new registrations in July — a massive 225% increase year-over-year. All told, Chinese EV manufacturers have a European market share of 5.9% – a record, according to JATO Dynamics.
Tesla is just one of the many EV automakers feeling the intense pressure from Chinese manufacturers. Ford CEO Jim Farley’s recent comments at the Aspen Ideas Festival described China’s rapid rise in the EV market as the “most humbling experience” of his career.
“Their cost, their quality of their vehicles is far superior to what I see in the West,” Farley said.
His candid comments presaged what may prove to be a seismic shift in the automotive world.
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