Tesla's European Sales Plunge 28% Despite Musk's Rebound Promises

Tesla's sales in Europe have continued to decline for the fifth consecutive month, despite the company's CEO, Elon Musk, promising a "major rebound" in sales. This downturn in sales comes after Musk's recent statements, which had sparked a buying frenzy among investors. The decline in sales is particularly notable given the high expectations set by Musk's promises of a significant rebound.

The persistent drop in sales can be attributed to several factors, including the backlash from European consumers who have been angered by Musk's public embrace of far-right political views. This has led to a significant decrease in consumer confidence and willingness to purchase Tesla vehicles. The situation is further complicated by the fact that Tesla's sales in Europe have been declining for several months, indicating a deeper underlying issue that goes beyond temporary market fluctuations.

Tesla's sales fell 28% last month in 30 European countries even as the overall market for electric vehicles expanded sharply. The poor showing comes after Tesla’s billionaire CEO had promised a “major rebound” was coming last month, adding to a recent buying frenzy among investors. Musk had said Tesla was sure to get a boost once the company was done retooling its factories to produce a new version of its biggest seller, the Model Y. But that was finished months ago, and the new models are widely available. Investors are now hoping that a cheaper Tesla expected to be out later year will help reverse the sales decline.

Overall, battery electric vehicle sales rose 25% in Europe compared to a year earlier. The market for EVs was particularly strong in Germany, where Musk has angered potential buyers by publicly supporting the far-right, anti-immigrant Alternative for Germany party in elections. Overall EV sales there leapt 45%.

China’s SAIC Motor was the big winner for the month with its European sales of EVs and other kinds of cars jumping 38%. That has allowed the company to leapfrog Tesla, which a year ago was selling more cars in the region. SAIC sold 18,716 vehicles last month versus Tesla’s 8,729.

The sales drop for Tesla comes at a crucial time for the company as it launches a test run of its driverless ‘robotaxis’ service in Austin, Texas. Musk says that if goes well, he expects to introduce the service in several other cities in quick succession and have as many as a million of the automated cabs on roads by the end of the year. Reviews so far have been mostly good, but the service is limited to a dozen or so cars and some passengers have circulated videos of problems during their rides, including one showing a robotaxi.

Federal traffic safety regulators said Tuesday they were looking into the videos. The recent decline in sales is a stark contrast to the optimism expressed by Musk, who had predicted a "major rebound" in demand. This discrepancy between Musk's predictions and the actual market performance highlights the challenges Tesla faces in the European market. The company's ability to turn around its sales performance will depend on its ability to address the concerns of European consumers and regain their trust. This will require a strategic approach that takes into account the unique challenges and opportunities presented by the European market.