Tesla (TSLA), once the runaway leader in electric vehicles, is now facing growing pressure as sales soften across major markets and rivals gain ground. While CEO Elon Musk has kept much of his recent focus on robotics, robotaxis, and securing shareholder approval for his $1 trillion pay package, the company’s core business of selling cars is losing its momentum.
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Sales Slow Across Key Regions
Tesla’s demand challenges are now visible in all three of its major markets: Europe, China, and the U.S.
In Europe, sales fell 48.5% in October compared to last year, according to the European Automobile Manufacturers’ Association. Year-to-date, Tesla sales are down about 30%, while overall EV sales in the region are up 26%, showing a clear loss in market share.
Global deliveries are also expected to decline, with analyst estimates pointing to a roughly 7% drop this year, following a small decline in 2024. While Tesla reported record U.S. deliveries in Q3, analysts believe much of that spike came from buyers rushing to take advantage of a tax credit that expired on September 30, and not from steady underlying demand.
Competition in the EV Space Heats Up
Tesla’s shrinking lead comes as new EV models flood the market. In Europe, consumers now have access to over 150 electric models from established and emerging brands, many priced lower than Tesla cars. Chinese EV makers, led by BYD Company Limited (BYDDF), are growing quickly across Europe and recently outsold Tesla in monthly sales.
Volkswagen AG (VWAGY) is also gaining momentum. The automaker reported a 78% increase in EV sales through September, selling more than triple the number of Tesla vehicles in Europe over the same period.
China shows the same trend. Tesla deliveries there fell 35.8% in October and are down 8.4% year-to-date, while brands like BYD, Chery Auto Co. (CHRY), and Xiaomi Corporation (XIACF) continue launching lower-cost, competitive EVs.
Tesla Tries to Regain Ground
Tesla has lowered prices and introduced cheaper variants of the Model 3 and Model Y to support demand. Analysts contend that these moves may help, especially as some legacy automakers scale back EV investments due to slowing consumer adoption.
However, many analysts believe Tesla needs a new mass-market model to drive meaningful growth.
Is Tesla Stock a Buy or Sell?
On Wall Street, Tesla stock currently has a Hold consensus rating from analysts. This is based on 14 Buys, 10 Holds, and 10 Sells issued by 34 analysts over the past three months. Moreover, at $383.04, the average TSLA price target indicates over 8% downside risk from the current trading level.
