This article was originally published by Tyler Durden at ZeroHedge.
Tesla faces mounting headwinds in Europe, with sales declining for the 10th time over the past 12 months. The slump is driven by an aging vehicle lineup, intensifying competition, and growing backlash over Elon Musk’s increasingly active role in European politics to save the imploding continent from radical leftists in Brussels.
According to the European Automobile Manufacturers’ Association (ACEA), Tesla’s sales in Europe fell for the second straight month in February, with 16,888 vehicles sold—down 40% from the same month last year.
ACEA showed that Tesla’s sales tumbled in the first two months of the year, negatively diverging from the 31% surge in industry-wide EV registrations.
Tesla’s shrinking market share comes after Musk’s brief foray into European politics, where he publicly supported the Alternative für Deutschland (AfD) ahead of last month’s election that saw historic support for the party. US Vice President JD Vance also endorsed AfD during the election campaign. Musk described AfD as the “best hope for the future” in Germany.
Overall, ACEA data showed a slowdown in new vehicle sales, which fell 3.1% last month as mounting economic uncertainty led consumers to hold off on big-ticket items.
Tesla and EU carmakers face a challenging year as the continent’s auto industry remains in a deep downturn. At the same time, US tariff threats and rising competition from Chinese automaker BYD further complicate the auto industry’s outlook for the region.
Ex-Europe, Tesla sales in China—excluding exports—fell 87% in February compared to the same month last year, marking its lowest monthly sales since August 2022.
At the beginning of March, Goldman analysts Mark Delaney, Will Bryant, and others told clients about their decision to revise down 1Q25 delivery estimates due to softening in key markets, including China, Europe, and the US:
Deliveries tracking softer in 1Q, we believe in part on the Model Y transition and partly due to weaker demand Tesla delivery data for January and February in key regions has been soft, which we believe is partly due to the Model Y changeover and partly due to somewhat weaker underlying demand than we had expected (as we think growth has also been slower than we had previously estimated for Model 3 and Cybertruck per delivery data, consumer surveys, incentives that Tesla has been utilizing, and the competitive landscape). We expect shipments to be stronger in the month of March driven by the refreshed Model Y ramp. Overall, we now expect deliveries of 375K in 1Q25, down from our prior 399K view and well below Visible Alpha consensus at 426K.
Delaney and Bryant provided more color on the slowdown on a regional basis:
- USA – Through February, deliveries are tracking flattish yoy per Wards and Motor Intelligence (with Wards showing a slight decline and Motor Intelligence reporting slight growth) but down meaningfully qoq as 1Q24 was impacted by the Model 3 transition;
- Europe – European registration data for January shows a >40% yoy decline, and registration data from daily reporting countries (i.e. UK, Spain, Netherlands, Denmark, Sweden, Norway) indicates a mid to high 20% decline through February (although we note that this daily reporting data does not include Germany, which has been a larger source of weakness for the more complete January data);
- China – CPCA data in January and registration data through February indicates a mid single digit decline in China retail sales yoy QTD, but assuming a stronger March as production of the new Model Y ramps, we think China could end up being more flattish yoy for 1Q25 overall.
Sales are slowing.
Slowing demand and Tesla backlash in the US and Europe have fueled a halving in shares. In the last week, shares have stabilized and reversed.
Meanwhile …
And this.
Tesla reports 1Q25 earnings on April 22.
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