Tesla (TSLA) Continues to Lose Ground in Europe’s EV Market

Electric vehicle (EV) maker Tesla (TSLA) continues to lose ground in many countries in Europe, as competition intensifies and macro pressures weigh on consumers’ spending. Moreover, backlash related to Tesla CEO Elon Musk’s far-right politics has also impacted demand in recent months. According to the latest data, the Musk-led company saw a notable slump in its car registrations in May in Spain, the Netherlands, and France.

Moreover, the latest data for May deliveries of Chinese EV makers, including BYD (BYDDF), Li Auto (LI), XPeng (XPEV), and Nio (NIO), indicates resilient year-over-year growth, adding to Tesla’s woes.  

Tesla Sees Weak Sales in Key European Markets

According to the French Automobile Manufacturers Association, new car registrations in France declined by 12.3% year-over-year in May to 123,919 vehicles. While sales of Stellantis Group (STLA) and Toyota (TM) vehicles declined by 10.12% and 25%, respectively, Tesla saw a steeper fall of 67% to 721 vehicles in May. This marked almost a three-year low for Tesla’s sales in France, with the revamped Model Y failing to revive demand.

Meanwhile, in Sweden, Tesla’s new car sales plunged 53.7% year-over-year to 503 vehicles, as indicated by registration data from Mobility Sweden.

Further, in the Netherlands, there was a 7% rise in new passenger car registrations to 30,188 units, with an 8% rise seen in fully electric vehicles to 10,440 cars. However, Tesla’s EV registrations in May fell to 1,057 vehicles from 1,660 in the prior-year quarter. Based on other reports released as of writing, Tesla’s May EV sales declined in Portugal as well. Interestingly, Norway witnessed a 213% jump in Tesla’s new car sales in May to 2,600. A Reuters report noted that the Model Y compact SUV has been Norway’s best-selling automobile in each of the last three years.

Overall, weakness in demand for Tesla’s EVs continued in many European markets last month following a 49% plunge in April sales.

Is TSLA Stock a Buy, Hold, or Sell?

Tesla stock has recovered more than 22% over the past month but is still down 14.2% year-to-date.

Wall Street is sidelined on Tesla stock, with a Hold consensus rating based on 16 Buys, 10 Holds, and 11 Sells. The average TSLA stock price target of $282.70 indicates a downside risk of 18.4% from current levels.

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