Tesla's sales in Europe are falling, rival BYD's are growing. Has Musk lost the market?

Tesla sales in Germany and the UK - Europe's largest electric car markets - collapsed in July, more than half what they were a year ago. Demand for Tesla also fell last month in France, Norway, Spain and Sweden. Tesla is increasingly losing the market to China's BYD, its main rival. Its sales in the German and British markets have more than quadrupled in a year.

Tesla deliveries in Germany fell 55% year-on-year in July, while the total number of electric car registrations rose 58% for the month, reported German agency KBA on Tuesday. Similarly, British agency SMMT reported a 60% drop in Tesla sales, while total electric vehicle registrations rose 9.1% year-over-year. These are the two largest car markets in Europe.

A week earlier, the French automakers' association (PFA) disclosed data showing Tesla registrations were down 27% in July and nearly 40% in the first seven months of the year. It is the third-largest electric car market in Europe. Tesla sales also fell in Norway, Spain and Sweden in July, wrote MarketWatch.

Tesla's weakness in the European market presents opportunities for both local automakers and BYD, accounts Bloomberg. In Germany -Europe's largest auto market and home to Tesla's only factory in the region - BYD outpaced Tesla in sales for the third time this year. In the entire European market BYD first beat Tesla back in April. Some analysts believe that by the end of the year, the brand could surpass the U.S. company in the global market as well, and this is despite the fact that BYD cars are still not sold in the U.S., Bloomberg noted.

BYD registered more than six times as many cars in the U.K. in July as it did in the same period a year earlier. That brought the company's market share to 1.91 percent since the start of the year - just 0.1 percentage point less than Tesla, Bloomberg added.

The company attributed the weak results of the beginning of the year to the disruption of the production schedule associated with the modernization of production lines of Model Y - a key model of Tesla - to produce its updated version, writes Bloomberg.

However, the decline in sales continued even after the ramp-up of production of the updated crossover, reinforcing investors' fears that the brand's reputation could have been damaged by CEO Ilon Musk's political activism, the agency explains.

On Monday, the company announced that it approved an interim payment to Musk worth about $30 billion in Tesla stock. The decision comes amid an ongoing litigation over his 2018 compensation package. Investors reacted positively to the news on Monday, expecting it to motivate Musk to devote more time to his work at Tesla.

"We believe this grant will allow Musk to remain CEO of Tesla until at least 2030 and will eliminate the stock overhang," Wedbush analyst Dan Ives wrote in a note to investors that is cited by Barrons, Wedbush analyst Dan Ives wrote. - Musk remains Tesla's most important asset, and this compensation issue has been an ongoing concern for shareholders."

Tesla is also actively launching robotaxi test rides to shift investor attention from falling sales to the company's prospects. In addition, Musk announced a budget version of the Tesla Model Y to compete with cheaper Chinese counterparts.

This article was AI-translated and verified by a human editor