Opinion
Tesla troubles run deeper than Musk politics
BYD is seen by some analysts to pull ahead of Tesla globally for the full year — and that’s without BYDs even being available in Tesla’s home market: The US
July 08, 2025 | 10:52 PM
Just as Elon Musk has fallen out with President Donald Trump and Tesla struggles with weak deliveries and a brand problem, analysts warn the electric vehicle giant is losing ground to rivals like BYD.Tesla is in a sales slump, with deliveries of its electric vehicles on track to decline for the second full year in a row.The polarising politics of CEO Musk has alienated car buyers in major markets.Customers have yet to flock back to showrooms after Musk stepped away from his activities in Washington and ended up in a very public feud with Trump.But Tesla’s problems run deeper than the consumer backlash seen over the past few months. While the automaker has given its most popular model — the Model Y — a facelift, it’s lacking a new, more affordable car to revitalise its dated lineup.That’s left the company vulnerable to competitors, particularly those hailing from China.Tesla’s deliveries hit an almost three-year low in the first quarter. The drop was due in part to the process of redesigning the Model Y, as Tesla paused output at each of its assembly plants to retool production lines for the revamped SUV.The company was counting on the spruced up Model Y to boost sales in the second quarter. Overall deliveries instead slid 13% from a year earlier, undermining Musk’s claim in mid-May that sales had "already turned around.”By Musk’s own admission, Europe is the company’s weakest major market. The number of new Teslas registered across the region plunged 37% during the first five months of the year, according to the European Automobile Manufacturers’ Association — even as the broader market expanded.Tesla’s struggles have created an opening for rival BYD. The Chinese automaker sold more fully electric cars in Europe than Tesla for the first time ever in April, in what one analyst called a watershed moment.Some are predicting BYD will pull ahead of Tesla globally for the full year — and that’s without BYDs even being available in Tesla’s home market: The US.Cox Automotive estimates Tesla’s US vehicle sales fell 15% in the first half. Tesla is still the top-selling EV brand in the US, but its share of electric-car sales has shrunk from more than 75% in 2022 to under 50% as of 2024, according to Cox-owned Kelley Blue Book.In China, the world’s biggest EV market, Tesla’s shipments from its Shanghai plant — destined both for domestic customers and export — declined for eight consecutive months year-on-year before ticking up in June, according to the China Passenger Car Association.New entrants are threatening Tesla’s standing, particularly in what was an already-crowded and competitive Chinese EV market.Musk has acknowledged "blowback” from his involvement in the Trump administration, though he also insisted he’s opened paths to consumers on the political right that could counter the sales he was costing Tesla on the left.After roughly a decade of predicting Teslas should soon be able to drive autonomously, the company launched its long-awaited robotaxi service in late June.It was a modest debut, with Tesla only offering rides to a small contingent of fans in a confined area of Austin.As of now, Tesla’s $1tn market capitalisation suggests investors remain buoyant.But the value they ascribe to the company is increasingly rooted in Musk’s vision of a future filled with autonomous vehicles and humanoid robots, rather than the human-driven EVs in the here and now.The challenge for Tesla now is to scale these operations to prove that its future is indeed in autonomy rather than automaking."The central question is, do you believe cars will be autonomous and electric in the future? If the answer is yes, Tesla will pull through and will be in a really good place,” said Gene Munster, managing partner of Deepwater Asset Management.
July 08, 2025 | 10:52 PM