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Tesla faces sales pressure in Europe, China and the U.S

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European sales fell 48.5% in October, even as

industry-wide EV

sales rose 26%

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Tesla's competition includes Chinese newcomers, improved

EVs

from legacy players

By Nick Carey and Abhirup Roy

Nov 26 (Reuters) - Tesla CEO Elon Musk has

spent much of this year focused on the carmaker's robotics

pursuits and winning shareholder approval for his freshly minted

$1 trillion pay package. In the meantime, the outlook for

Tesla's main business - selling cars - is darkening.

Tesla faces sales pressure in the world's three biggest car

markets: Europe, China and the United States. The

electric-vehicle maker's sales fell 48.5% across Europe in

October versus the same month last year, according to data

released by the European Automobile Manufacturers' Association

on Tuesday. For the year, its sales are down about 30% in the

region, while industrywide EV sales jumped 26%.

Tesla's global vehicle deliveries are expected to decline 7%

this year, according to Visible Alpha, after a 1% drop in 2024.

That is despite record third-quarter deliveries, which were

juiced by American car buyers racing to beat the September 30

expiration of an EV tax credit.

The weak European results suggest there will be no quick rebound

from the sales turmoil that began late last year, after Musk

publicly praised far-right figures, setting off protests across

the region. Musk has gone relatively quiet on politics in recent

months - but Tesla's European business has not recovered,

signaling more fundamental problems.

As recently as 2023, Tesla's Model Y SUV was the world's

top-selling car, gas or electric. But Tesla has slid down the

sales charts, as rivals have introduced a broad array of

improved EVs - often at lower prices - while Tesla's narrow

lineup of models has grown stale, analysts say.

Tesla did not respond to requests for comment.

Late last year, Musk told shareholders he expected vehicle

sales to grow 20-30% in 2025. In January, the company said it

expected a return to growth, without offering an estimate,

before pulling that guidance in the following quarter. In

October, Tesla said any growth would depend on macroeconomic

factors and how quickly it could add autonomy to its cars and

ramp up factory production.

LAPPED BY VW

Tesla's troubles are most acute in Europe, where more than a

dozen electric models sell for under $30,000, with more on the

way. A wave of Chinese brands is entering Europe with

head-turning designs and broader choice, from EVs to petrol cars

and hybrids.

Analysts interviewed by Reuters do not see a quick fix for Tesla

in Europe, where it offers just two mass-market models: the

Model 3 sedan and Model Y. Tesla recently introduced a

stripped-down, lower-priced version of the Model Y to boost

sales.

Meanwhile, EV models from other manufacturers are proliferating.

In the United Kingdom, more than 150 electric models are on

offer from an array of brands, including many new Chinese

competitors. At least 50 new electric models are due out next

year, according to EV-buying advice site Electrifying.com.

"Out of those 50, none are Teslas," said Electrifying.com

CEO Ginny Buckley.

Across Europe, China's BYD sold 17,470 cars in

October, more than double Tesla's sales. Meanwhile, in a stark

sign of Tesla's fading dominance in Europe's EV market,

Germany's Volkswagen posted an EV sales rise of 78.2%

through September this year to 522,600 units, triple Tesla's

sales.

VW's EV efforts sputtered for years despite a wholehearted

embrace of the technology following its 2017 diesel emissions

cheating scandal. It once lagged Tesla so badly that VW's former

CEO openly fretted about the risk posed by Musk's company.

"The problem for Elon Musk is not just his own cars and the

Chinese carmakers," said Ferdinand Dudenhoeffer, head of the CAR

think tank at the University of Duisburg-Essen. "The problem for

Elon Musk is also that the Europeans have caught up."

CHINA SALES RETREAT; A BLEAK U.S. OUTLOOK

In China, Tesla's sales and market share also are declining,

although not as steeply as in Europe. Tesla deliveries in China

fell to a three-year low in October, dropping 35.8%. For the

year, Tesla's sales in China were down 8.4% through October.

Tesla faces a slew of rejuvenated Chinese brands, such as Chery

, along with newcomers including Xiaomi ( XIACF ),

whose YU7 has quickly emerged as a Model Y rival since its

launch in June.

In the U.S., Tesla sales surged 18% in September, research

firm Motor Intelligence estimated, boosted by a last-minute rush

from car shoppers trying to beat the September 30 expiration of

a $7,500 tax credit. That trend reversed in October, with a 24%

drop. Auto executives expect the EV market to remain cold.

Tesla could benefit as several legacy automakers dial back

EV models and factory investments, including General Motors ( GM )

, Ford and Honda ( HMC ). Also, the recent launch

of new, cheaper variants of the Model Y and Model 3, priced

around $5,000 lower, could help bolster its market share,

analysts have said.

Some analysts have said Tesla needs a new vehicle to revive

sales. But there is little evidence of a new model for human

drivers in the pipeline, as Musk pivots his focus to

self-driving robotaxis and humanoid robots.

Musk's new pay package, however, does not require a big

surge in sales growth. The CEO can unlock a multibillion-dollar

award if Tesla averages 1.2 million vehicles annually over the

next decade, along with share appreciation. That is about a

half-million fewer than the company sold in 2024.