Hey everyone, welcome back.
Today we're gonna try to understand
what's behind the recent dip in Tesla sales in Europe.
Yeah.
You know, you've given us some pretty interesting material
to dig into for this deep dive.
Right.
We've got a transcript from a video analysis
by GROC3 and AI.
Okay.
And we've also got some insights
from those automotive analysts at C-SCO UPS.
There's a lot of chatter online
about whether this is all down to Elon Musk.
Yeah.
I have a feeling there's more to this story.
Oh, absolutely.
Wouldn't you agree?
Yeah, while Elon Musk's activities
definitely get people talking,
both the AI analysis and the industry experts seem to agree
that the bigger issue is the transition
to the redesigned Model Y.
Okay, so let's dive into that Model Y refresh.
Sure.
GROC3, the AI, makes a pretty strong case
for why this is causing such a stir.
Yeah.
Can you walk us through that a bit?
Sure.
GROC3 points out that the updated Model Y
makes up a massive 60% of Tesla's global sales.
So when they're shifting production over to the new model,
that's gonna create a pretty significant impact
on their sales numbers overall.
That makes sense.
Yeah.
And GROC3 actually estimates that a 55 to 70% drop
in sales of the older Model Y alone
could explain almost all of that 45 to 50% decline
we're seeing in Europe.
That's huge.
And it makes sense.
Yeah.
If everyone's holding out for the shiny new Model Y
with all the bells and whistles,
they're not gonna be rushing out to buy the older model.
Exactly.
But it's interesting that GROC3 didn't shy away
from calling out Elon Musk either.
Oh, yeah.
They actually labeled him a major source of misinformation.
They did.
And I think that brings up a really important question.
To what extent are Musk's actions
and the controversy surrounding him truly affecting
the Tesla brand, especially in a market like Europe?
Right, because let's be honest.
Some of his recent choices haven't exactly painted him
in the most favorable light.
Definitely.
And that seems to be reflected in the analysis
from C-SCOPE-PS, who specifically highlighted incidents
like that infamous salute and his political stances.
Oh, right.
Particularly his vocal support
of the far right AFD party in Germany.
You have to wonder how those actions are landing
with European consumers, especially when you consider
the cultural and political landscape over there.
Yeah.
It doesn't seem like the kind of move
that would win you a lot of fans.
It's hard to put a precise number
on how much those actions are hurting Tesla.
But it's safe to say they're probably not helping
their image in Europe.
Especially when you consider that the European EV market
overall is actually booming right now.
Right.
Our sources mention a 37% increase in sales
just in January of 2025.
Exactly.
That's a stark contrast to what's happening with Tesla,
which suggests that there are issues at play here
that go beyond a general slowdown in the EV market.
So what we're seeing is a bit of a perfect storm brewing
for Tesla in Europe.
This Model Y transition, the negative press around Elon
Musk, and an increasingly competitive EV market.
CCQPS even points to potential inventory shortages,
perhaps stemming from those aggressive year-end sales
they had back in 2024.
I'm curious to get your take on how these different pieces
of the puzzle fit together.
Well, let's start by unpacking this Model Y refresh
in a bit more detail.
Grock III focused heavily on the numbers.
But I think it's crucial to understand
why this particular model is so central to Tesla's success,
especially in Europe.
That's a great point.
What is it about the Model Y that
makes it such a hot commodity?
Well, for one, it hits that sweet spot
in terms of size and practicality.
OK.
It's spacious enough for families,
but it's also not too bulky for navigating European cities,
which tend to have narrower streets and tighter parking
spaces.
So it caters to the European lifestyle,
which makes a lot of sense.
Exactly.
And then you factor in Tesla's reputation
for performance and technology.
And it's easy to see why the Model Y has become so popular.
Yeah.
But that popularity also creates challenges
when you're trying to roll out a major redesign.
You have to manage expectations.
You have to make sure the new model lives up to the hype.
And you have to do it all while keeping your production lines
running smoothly.
It's like walking a tightrope.
And the stakes are incredibly high,
given how much of Tesla's sales are tied to this single model.
Precisely.
And that's where this transition becomes even more interesting.
It's not just about swapping out one model for another.
Right.
It's about managing a complex supply chain,
ensuring that you have the parts and the capacity
to meet demand.
And dealing with potential disruptions along the way,
Cisco PS mentioned those possible inventory shortages,
which suggests that Tesla might be grappling
with some of those very challenges.
So while customers are eagerly awaiting
the arrival of the new Model Y, Tesla
is having to juggle all of these logistical hurdles
behind the scenes.
I imagine that can't be easy.
Not at all.
And then you layer on the Elon Musk factor,
and it becomes even more complicated.
It's interesting because it sounds
like there are two very distinct narratives playing out here.
The internal challenges that Tesla's facing with this Model
Y refresh, and then the external perception of the brand,
which is being heavily influenced by Elon Musk's actions.
You hit the nail on the head.
And the question is, how much are those two narratives
intertwined?
Is the negativity surrounding Elon Musk actually driving
people away from Tesla?
Or is it just adding to an already challenging situation?
It's like trying to untangle a knot.
But every time you think you're making progress,
you find another twist or snag.
But let's shift gears for a moment
and talk about the competition.
We touched on the Toyota BZ4X earlier,
but it'd be interesting to delve into how other EV makers
are faring in this European market.
Absolutely.
While Tesla is grappling with these challenges,
the rest of the EV market in Europe seems to be thriving.
We see established automakers like Volkswagen,
Hyundai, and Kia making significant inroads
with their EV offerings.
And then you have new players like BYD and Neo coming in
from China and shaking things up even further.
It's becoming quite a crowded playing field.
And each of these companies is bringing its own strengths
and strategies to the table.
What do you think sets some of these competitors apart
from Tesla, especially in the European context?
One key difference is their approach to design and branding.
Tesla has cultivated a very distinct image,
sleek, minimalist, tech focused.
But that aesthetic might not resonate
with every European consumer.
Some might prefer a more traditional look and feel,
which is where brands like Volkswagen or Mercedes-Benz
have an advantage.
It's about understanding the cultural nuances of each market.
What works in California might not necessarily work
in Berlin or Paris.
Exactly.
And then there's the issue of practicality.
Tesla's supercharger network is fantastic,
but it's not as ubiquitous in Europe as it is in the US.
Some of these European automakers are leveraging
existing charging networks or collaborating
to build out new ones, which could give them an edge
in terms of convenience.
So it's not just about the car itself,
it's about the entire ecosystem that surrounds it.
The charging infrastructure, the service network,
the overall ownership experience.
Right.
And then you have the issue of price.
Tesla has positioned itself more at the premium end
of the market, while some of these other automakers
are offering EVs at more competitive price points.
That could be particularly attractive to European consumers
who are already accustomed to smaller, more affordable
vehicles.
It's fascinating to see how the dynamics of the EV market
are playing out differently across different regions.
In the US, Tesla has been the undisputed leader for years,
but in Europe, it seems like the competition is much more
fierce.
And that competition is only going to intensify
as more EV models come online and as consumers become
more comfortable with the idea of electric vehicles.
It will be interesting to see how Tesla adapts
to this evolving landscape.
We talked earlier about the potential risks for Tesla,
but I'm also curious about the opportunities.
Could the sales dip actually be a catalyst for Tesla
to reevaluate its strategies and come back even stronger?
That's a great question.
Sometimes, a bit of adversity can be the push a company needs
to innovate and evolve.
This could be an opportunity for Tesla
to take a step back, analyze the market,
and identify areas where it can improve.
It's like a reset button, a chance
to say, OK, what's working, what's not,
and how can we do things better?
Exactly.
Maybe they'll double down on building customer loyalty,
strengthening their supply chains,
or exploring new partnerships to expand their reach,
or perhaps they'll focus on developing even more
innovative technologies that further differentiate them
from the competition.
And maybe, just maybe, Elon Musk will take a break
from Twitter and focus on steering the company
through these challenges.
One can only hope.
But jokes aside, I think the situation
highlights a broader point about the EV market as a whole.
It's still in its early stages, and there's
a lot of fluidity and change happening.
What seems like a setback today could be a stepping stone
to even greater success tomorrow.
It's a dynamic and unpredictable space,
and that's what makes it so exciting to watch.
We've talked a lot about the challenges Tesla is facing,
but what about the flip side?
What are some of the positive trends
that are emerging in the European EV market?
One encouraging trend is the growing awareness
and acceptance of electric vehicles among consumers.
People are becoming more educated about the benefits of EVs,
not just in terms of environmental impact,
but also in terms of performance, cost savings,
and overall driving experience.
And that shift in mindset is being driven
by a number of factors, right?
You have government incentives promoting EV adoption.
You have improvements in battery technology
that are extending range and reducing costs.
And you have a growing charging infrastructure that's
making EVs more convenient to use.
Absolutely.
And as those factors continue to improve,
it's only going to accelerate the transition
to electric mobility.
We're seeing more and more people make the switch to EVs
for their daily commutes, family trips,
and even long-vistance journeys.
It's no longer a niche market.
EVs are becoming mainstream, and that's a really positive sign
for the future.
It is.
And it's not just about individual consumers.
We're seeing businesses, municipalities,
and even entire countries embracing EVs
as part of their sustainability goals and transportation
strategies.
It's becoming a global movement.
And Europe seems to be at the forefront of that change.
But as we discussed earlier, the popularity
of certain EV models, like the Toyota BZ4X,
raises some concerns.
Right.
While it's great to see more EVs on the road,
it's important to ensure that those early experiences are
positive.
If people are buying EVs that don't meet their expectations
in terms of range, charging speed, or overall performance,
it could create a negative perception
that hinders the long-term adoption of electric vehicles.
It's like the old adage, you never get a second chance
to make a first impression.
The success of the EV revolution
hinges on ensuring that those first impressions are
overwhelmingly positive.
Couldn't agree more.
Automakers have a responsibility to deliver EVs
that are not only functional, but also desirable and enjoyable
to drive.
And consumers have a role to play as well
in doing their research and choosing EVs that
meet their needs and expectations.
It's a collaborative effort, and it's
going to require a lot of communication and education
to ensure that everyone is on board with this transition
to electric mobility.
Absolutely.
And I think that's where platforms like this podcast
come in.
By having these conversations, by exploring the complexities
of the EV market, and by sharing insights and perspectives,
we can help to shape a future where electric vehicles are
the norm, not the exception.
I love that.
We're not just reporting on the news.
We're actively participating in the conversation
and helping to drive the change we want to see in the world.
Yeah.
But before we get too carried away with our own importance,
let's circle back to Tesla for a moment.
We've covered a lot of ground, but I'd
like to synthesize what we've learned
and try to answer the question that brought us here
in the first place.
Why are Tesla sales slumping in Europe?
Sure.
I think we can boil it down to a confluence of factors.
The Model I refresh is undoubtedly a major contributor.
It's created a bit of a waiting game
where customers are holding out for the new model, which
has impacted sales of the current model.
And that transition has been further complicated
by potential supply chain issues and inventory shortages.
So we have a situation where demand for the current Model
Y is down, production of the new one is still ramping up,
and there might not be enough inventory
to meet even the reduced demand.
Not an ideal scenario.
Not at all.
And then you have the Elon Musk factor, which
is harder to quantify but no less significant.
His actions and controversies have
generated negative press, which could
be eroding consumer confidence in the Tesla brand,
especially in a market as sensitive to social and political
issues as Europe.
It's like trying to build a house on a foundation that's
constantly shifting.
You might have the best blueprints
and the most skilled builders, but if the ground beneath you
is unstable, it's going to be incredibly difficult
to create something lasting.
That's a great analogy.
And to complicate matters further,
Tesla is facing increased competition
from both established automakers and new players
who are eager to grab a share of the growing EV market.
So it's a combination of internal challenges,
external pressures, and a rapidly evolving
competitive landscape.
It's a lot for any company to handle,
even one as innovative and disruptive as Tesla.
It really paints a picture of just how complex the situation is
for Tesla right now.
But I think what's been most interesting about this deep dive
is seeing how those external factors, especially Elon Musk's
actions, are interacting with Tesla's own internal strategies
and transitions.
Absolutely.
It's a reminder that even companies
at the forefront of innovation aren't operating in a vacuum.
They're subject to the same market forces,
consumer perceptions, and yes, sometimes even
the consequences of their CEO's decisions.
Yeah, and I think it also underscores
a point we made earlier about the importance of consumer
experience.
We were talking about the Toyota BZ4X
and how a less than ideal EV can potentially sour people
on the entire concept.
It makes you wonder, what will it
take for electric vehicles to truly become the go-to choice
for the average consumer?
That's a question with a multifaceted answer.
First and foremost, automakers need
to deliver EVs that not only meet but exceed expectations.
Range anxiety needs to become a thing of the past.
Charging needs to be fast, convenient, and readily
available.
And the overall driving experience
needs to be compelling, from performance and handling
to interior comfort and technology.
So it's not just about being green anymore.
It's about offering a superior product that
happens to be electric.
Precisely, consumers shouldn't feel
like they're making a compromise by choosing an EV.
They should feel like they're getting the best of both worlds,
a car that's good for the planet and great to drive.
And beyond the car itself, there needs
to be a robust ecosystem in place to support EV adoption.
We talked about the importance of a reliable charging
infrastructure, but what about things like service and maintenance?
Those are crucial aspects as well.
Consumers need to feel confident that they can easily service
their EVs and that any issues will be resolved quickly
and efficiently.
This is where traditional automakers with established service
networks might have an advantage, at least initially.
It seems like there are a lot of pieces
that need to fall into place for the EV revolution to truly
take hold.
There are, but I'm optimistic.
We're seeing tremendous progress on all fronts,
from battery technology to charging infrastructure
to consumer awareness.
And with each advancement, the barriers to EV adoption
are lowered.
So to wrap things up, it seems like Tesla's European sales
dip is a snapshot of a company caught
in the midst of multiple transitions internally
with the Model Y refresh and externally
with the evolving EV landscape and some self-inflicted
challenges.
Yes, and I think what we can learn from the situation
is that even industry leaders are not
immune to the forces of change.
It's a reminder that adaptability, strategic decision
making, and a focus on the customer experience
are crucial for success in any market, especially one
as dynamic as the EV space.
And as we've seen, those forces of change
can come from unexpected places, including the CEO's Twitter
account.
Indeed.
It highlights the importance of considering all stakeholders
and understanding the interconnectedness
of internal decisions and external perceptions.
Well, this has been a fascinating deep dive
into the world of Tesla, European EV sales,
and the many factors shaping the future of mobility.
As always, a big thank you to you, our listener,
for providing such thought-provoking source material.
We hope this discussion has provided you
with some valuable insights and maybe even sparked
some new questions of your own.
Until next time, keep diving deep.