Tesla's European Sales Plunge 62% Amid Model Y Delays, BYD Competition

Tesla Inc. (TSLA.US) is grappling with a significant downturn in its European market, as evidenced by a sharp decline in vehicle registrations across several key regions. In April, Tesla registered only 512 new cars in the UK, a 62% decrease from the same period last year. This trend is not confined to the UK; Tesla's registrations in Germany, France, Denmark, and Sweden also saw substantial declines of 46%, 59%, 67%, and 81% respectively.

One of the primary factors contributing to this decline is the introduction of the new Model Y, which has led to a temporary slowdown in production. Despite starting deliveries of the new Model Y in Germany and other European regions in March, the deliveries are currently limited to the all-wheel-drive version. It remains uncertain whether these delivery volumes will increase to higher levels. However, it is clear that the new Model Y is now available for delivery.

Two significant factors are exacerbating Tesla's challenges in Europe. Firstly, BYD's growing sales in the region are eroding Tesla's market share in multiple European countries. Additionally, even traditional automakers such as Volkswagen, Ford, and Fiat have seen their sales increase in April, further intensifying the competition.

Another critical factor is the controversial behavior of Tesla's CEO, Elon Musk. Musk's close relationship with former U.S. President Donald Trump and his support for right-wing politicians in Europe have impacted Tesla's brand image. Protests against Tesla showrooms in the U.S. and abroad continue, and car owners are selling their vehicles at an alarming rate, leading to a drop in secondary market prices.

In response to the brand damage and the first-quarter sales decline, Musk announced during the company's latest earnings call that he would "invest more" time in Tesla. Musk has pledged to reduce his activities in Washington, D.C., and spend more time at Tesla's headquarters in Austin, Texas, as the company's board of directors appears to be on the brink of collapse.

Reports from last week indicated that Tesla's board of directors is in the initial stages of a formal process to find the next CEO for the electric vehicle manufacturer. According to the reports, the board has also informed Musk that he needs to spend more time at the company and make it clear to Tesla's investors and the public that he is returning to the company. Tesla's chair, Robyn Denholm, has dismissed these reports as "completely false," but analysts suggest that the tension between Musk and the board was "very intense" before Musk publicly committed to spending more time at Tesla.