Tesla Is Losing Ground In The U.S. And Europe: Here's Why

It doesn't seem to be a good year for Tesla. The latest data collected by JATO Dynamics for the first half of this year shows Tesla losing ground in both the United States and Europe, where sales fell by 8% and 13% respectively.

While the general public is not entirely enthusiastic about electric cars, overall demand has actually grown in both regions. New, more competitive models introduced on both sides of the Atlantic are attracting more people, despite growing uncertainty about incentives and the future plans of the OEMs that produce these cars.

In Europe, the brand's volume fell from 185,200 units in the first half of 2023 to 161,300 units for the same period in 2024. However, during that same timeframe, total EV registrations increased by 1.7%.

This means Tesla's market share in the European BEV market fell from 19.8% to 17.2% this year. Tesla was the carmaker with the second-highest decline in BEV market share in Europe through the first six months of 2024, behind only the Volkswagen Group, which fell from 22% to 18.7%.

Tesla and Volkswagen lost ground to the Geely Group, which was boosted by the solid results of the Volvo EX30, and the BMW Group, which continues to reap success with its latest models. Chinese brands also grew, mainly thanks to BYD.

The situation in the United States is similar. Tesla's sales volume dropped from 324,900 units in the first half of 2023 to 299,200 units this year. Meanwhile, overall BEV sales increased by 7.6% in the same period. As a result, Tesla's share dropped from 59.8% in 2023 to 51.2% in 2024. The company is still a dominant player in its home market, but it's worth noting that numerous competitors posted strong gains amid Tesla's losses. Hyundai increased 34%, while Ford saw a 48% increase. Rivian was even better at 77%, and Kia managed a 110% jump.

The first reason for Tesla's decline is obvious. Growth can't continue forever, especially when the range is still limited and quite old. The Model 3 received a refresh in 2023 but it dates to 2017. The Model Y is already five years old, and the Model S goes way back to the early 2010s.

And the competition is coming on strong. In Europe, Tesla is feeling pressure from premium German brands and the Chinese industry. As mentioned previously, Ford, the Koreans, and Rivian are coming on strong in the US. The company's newest vehicle, the Cybertruck, hasn’t really taken off in terms of sales with just 11,300 sold in the US through the first half of 2024.

Finally, the price cuts that worked so well in 2023 aren't so attractive now. As more EVs come to market from other brands, increasing supply and selection effectively reduces demand and prices fall. At this point, Tesla needs more than just big discounts and attractive updates for its cars. It needs fresher products in more segments.