Consumers around the world increasingly do not want to pay full price for Teslas, once the leader of the EV market
Tesla $TSLA has slashed prices of its Model Y Long Range and Model Y Performance in Germany by €5,000 to €49,990 ($54,340) and €55,990 ($60,583), respectively. The price cuts follow similar ones made in China on the Model 3 and Model Y about a week ago.
Once an early leader in electric vehicles, Tesla is facing growing competition not just from the EV market in China but now an increasingly competitive one in Europe.
In Germany, Volkswagen surpassed Tesla in EV sales in 2023, registration data from the country’s Motor Transport Authority (KBA) released on Tuesday showed. Meanwhile, BMW, headquartered in Munich, Germany, now generates the most sales growth from EVs, the automaker’s chief financial officer said in an interview with Reuters this week. This all comes as carmakers are facing pressure from EU regulatory deadlines on banning the sale of new gas-fueled cars.
To add to that, Tesla said it will suspend most car production at its factory near Berlin from Jan. 29 to Feb. 11. The US-based automaker cited a lack of components due to attacks on shipping in the Red Sea, which had been disrupting delivery routes for companies like Ikea and Maersk.
Tesla has been discounting EVs in China for the last year. In 2022, China’s EV giant BYD, counting both full electric and plug-in vehicles, dethroned Tesla as the world’s biggest seller of EVs. Then, in the fourth quarter of 2023, BYD beat Tesla in electric car sales.
That said, Tesla still earns more money on each car than any other global competitor.
BYD has a slither of a presence in Europe, commanding only 0.1% market share in November, according to data cited by Automotive News Europe. Still, Tim Urquhart, a principal automotive analyst at S&P Global $SPGI Intelligence, said that competition in European markets will increase as more Chinese automakers enter the EV space in the region.
On Monday, Elon Musk, the CEO of many companies — X $TWTR, SpaceX, and Tesla —said that he wants more control of Tesla, after selling off 22 million shares of the company to raise cash to buy Twitter (now X), a decision that reduced his stake in Tesla from 17% to about 13%.
“I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can’t be overturned,” he said on X.
More generally, Tesla has been hurt by macroeconomic trends, like rising interest rates and issues specific to Tesla — including being accused of not paying enough attention to the company while it faces a wide range of challenges.
Tesla stock is down 13.64% so far this year.
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