Why Tesla is losing ground in Europe and the United States

It doesn't look like it's going to be a good year for Tesla. After record results in 2023, when it was not only the most popular pure electric car manufacturer in the world, but also the best-selling battery-powered vehicle brand on the planet, its flagship product, the Model Y, is not making as much progress as it used to. The latest data from JATO Dynamics for the first half of this year shows that Elon Musk's company is losing ground in both the US and Europe, with sales down 8% and 13% respectively.

Although the general public is not entirely enthusiastic about electric cars, overall demand has increased in both regions. The new, more competitive models being introduced on both sides of the Atlantic are attracting more and more people, despite growing uncertainty about the incentives and future plans of the manufacturers producing these cars.

Less market share, as expected

The first obvious consequence of Tesla's falling sales is its market share. While the brand's volume fell from 185,200 units in H1 2023 to 161,300 units in H1 2024, total pure electric car registrations in Europe rose by 1.7% over the same period.

Tesla sales first half 2024 - graphic

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This means that Tesla's share of the European BEV market has fallen from 19.8% in H1 2023 to 17.2% this year. Tesla is the carmaker whose BEV market share fell the most in Europe in the first six months of this year, behind the Volkswagen Group, which lost 3.3 points, from 22% to 18.7%. Tesla and Volkswagen lost ground to the Geely group, boosted by strong results from the Volvo EX30, and the BMW group, which continues to enjoy success with its latest models. Chinese brands also made progress, mainly thanks to BYD.

Automaker market shares first half 2024

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The situation in the United States is similar. Tesla's sales volume has fallen from 324,900 units in the first half of 2023 to 299,200 units this year. While overall BEV sales increased by 7.6% over the same period, Tesla's share fell from 59.8% in 2023 to 51.2% in 2024. Unlike in Europe, Tesla remains a dominant player in its home market, leaving all its rivals behind. However, it is important to mention the strong results achieved by Ford with a 48% increase, Hyundai with a 34% increase, Kia with a 110% increase and Rivian in fifth place with a 77% increase.

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Read also:

Who are the biggest electric car manufacturers in the world?

How are sales of the Tesla Cybertruck coming along?

The reasons

The first reason for Tesla's loss of market share is obvious: growth cannot continue forever, especially when the range is still limited and rather ageing (the Model 3 is over eight years old, while the Model Y is now five years old).

Tesla Model 3 Performance

Tesla Model Y

Not to mention growing competition from premium German and Chinese players in Europe, and from Ford, the Koreans and Rivian in the United States. Tesla's latest model, the Cybertruck, has yet to take off in terms of sales, with just 11,300 units in the United States in the first half of 2024, compared with 196,700 units for the Model Y and 70,300 units for the Model 3.

Finally, the price reductions that worked well in 2023 are no longer as attractive today. As new makes and models come onto the market, the range expands and prices tend to fall. Tesla needs more than big discounts and attractive upgrades for its cars. The brand needs fresher products in more segments.

The author of the article, Felipe Munoz, is a specialist in the automotive industry at JATO Dynamics.

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