Tesla’s European Sales Decline Persists, but Revamped Model Y Boosts Deliveries in Norway

Tesla’s car sales across much of Europe continued to experience a significant downturn in May, marking the fifth straight month of declining numbers in key markets, Reuters reports.

However, Norway stood out as a notable exception, where deliveries of Tesla’s refreshed Model Y SUV surged sharply, signaling potential for recovery as the company expands its revamped model’s presence.

Data from May shows steep drops in Tesla sales in several European countries. Sweden reported a 53.7% year-on-year decline, while Portugal’s Tesla sales plummeted 68%, despite both markets witnessing nearly 25% growth in overall electric vehicle (EV) sales. Similar trends were observed in Denmark (down 30.5%), the Netherlands (down 36%), Spain (down 19%), and France, where sales fell by 67% according to figures from PFA.

In contrast, Norway saw a remarkable 213% increase in Tesla sales, reaching 2,346 units in May compared to 690 the previous year. This rise coincided with the rollout of the updated Model Y, which has been well received by Norwegian buyers. Tesla has also begun taking orders for the new Model Y in other major European markets including Germany, the UK, France, and Italy, though deliveries there are expected to start later in June and thus have not yet impacted sales figures.

Industry observers point to innovation as crucial for Tesla’s future growth. Ben Nelmes, founder of EV data analysis firm New AutoMotive, noted that Tesla’s strong performance in Norway demonstrates the importance of refreshing the product lineup in a rapidly evolving market. Meanwhile, Tesla has been offering financial incentives such as price reductions in countries like Sweden, Germany, the UK, and France, and interest-free loans in Norway, to encourage purchases.

Tesla’s challenges in Europe are compounded by intensifying competition. Established automakers are ramping up production of more affordable electric vehicles, while Chinese EV manufacturers like BYD and Xpeng are gaining market share. For instance, in Sweden, Volkswagen’s electric ID.7 outsold Tesla’s Model Y nearly two to one. Additionally, Tesla’s Model 3 was surpassed by models including Porsche’s Macan, BYD’s Seal, and Xpeng’s G6.

The company’s sales slump has been partially attributed to CEO Elon Musk’s political controversies, which have sparked protests and vandalism at Tesla locations in both Europe and the United States. Musk recently announced his departure from the Trump administration to refocus on running Tesla.

Despite the current difficulties, Tesla remains a key player in the European EV market. The Model Y was the continent’s best-selling car in 2023, and the upcoming wider availability of the updated Model Y could help reverse the downward trend. However, industry experts caution that with limited new models introduced since 2020, Tesla will need to continue innovating to maintain its market position amid rising competition.