Tesla d’Elon Musk is in an increasingly precarious position. The car manufacturer, once the undisputed leader in the electric vehicle revolution (EV), saw its downward sales spiral, a decline that started last year and that should not get worse in 2024 .
The growing competition of national and international rivals, geopolitical changes and more and more controversial political trends all play a role in Tesla’s problems.
Now, the company faces a perfect storm: Aggressive Chinese EV manufacturers are tightening their grip on the market, European regulators are looking for ways to limit the domination of American technology in reprisals of the protectionist threats of President Donald Trump , and in the United States – the home of Tesla Turf – the company is taken in a paradox. Musk has won a service among the conservatives, but those who line up with its policy are the least likely to embrace electric vehicles in the first place.
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Tesla’s competitive difficulties were deepened in China
The Chinese electric vehicle market has become a battlefield and Tesla is struggling to hold the ground. In January, the company declared a drop of 11.5% of sales in China compared to the same month of last year, providing 63,238 units, against 71,447. Meanwhile, byd, the dominant dev player China continues to skyrocket, reporting an increase of 47% from one year to the next, sales reaching 296,446 units last month.
China, the largest market in the world in the world, was once a major growth engine for Tesla. But the company now faces an increasingly difficult battle. Byd and other national rivals, such as Nio and Xpeng, intensified competition by deploying high performance electric vehicles and favorable to a budget. Although Tesla has used price reductions to maintain demand, its strategy has only given decreasing yields, each successive price reduction eating in its margins.
To worsen things, the Chinese feeling of consumers towards American brands is deteriorating in the midst of American-Chinese trade tensions. The narrow links of Musk with Washington, once an asset, can now be a passive because Tesla is increasingly considered as a foreigner on the market closely controlled in China.
In Europe, Tesla faces regulatory and political reactions
In Europe, Tesla’s difficulties are no less serious. Sales across the continent fell 13% in 2024, with Germany – the largest automotive market in Europe – seeing Tesla sales in more than 41%. France, the second largest EV market in the EU, has also become cold to Tesla, where sales deposited 63% in January.
But beyond competition, Tesla’s future on the European market faces an even greater existential threat: geopolitics.
The European Union is preparing for potential economic conflicts with the United States following Trump’s pricing threats. Trump has repeatedly threatened to impose prices on European goods, and the EU makes countermeasures. A key target? American technological companies.
Tesla, like other American companies operating in Europe, risks becoming collateral damage in the growing fracture between Washington and Brussels. European regulators, already tightening programs and production regulations, could introduce even more strict measures aimed at weakening American domination in the electric vehicle sector.
Musk, for his part, did nothing favors. His embrace of the extreme right alternative for Germany (AFD) sparked a political backlash, the French government openly condemning it to “attack European regulations and values”. In a continent where sustainability and progressive policies remain at the heart of the movement of electric vehicles, the alignment of Musk on Durage right politics is both governments and consumers.
In the United States, Musk finds political favor, but at what price?
Back home, Tesla faces another paradox. Musk has become an increasingly celebrated figure among the conservatives, who consider him a champion of freedom of expression and a criticism of progressive politicians. The problem? The same conservative base that applauds Musk’s challenge to “awake” culture is also the least likely demography to embrace electric vehicles.
While democrats and liberal voters were traditionally basic of Tesla’s customers – attracted to the brand’s environmental appeal – Musk’s passage to the right has moved a lot. On the other hand, conservatives, who are now more favorable to personally musk, are much more skeptical of electric vehicles and climatic policies in general.
The tension between Musk’s policy and Tesla’s product supply is perhaps better illustrated by the latest move from the Trump administration. On Thursday, the White House ordered the American states to suspend a federal program of federal charges of $ 5 billion, marking another setback for the development of the country’s EV infrastructure. The decision is a blow for Tesla, which relies on a solid national charging network to support its vehicle sales.
The suspension of the EV load initiative, coupled with the efforts previously blocked by the Biden administration to extend incentives to electric vehicles, means that Tesla is now found at a inflection point. The market that Tesla has helped to create is beyond, while the political landscape to which it has become increasingly linked is not conducive to the growth of electric vehicles.
Tesla’s problems are no longer just a question of competition or price. They are structural, political and, to a large extent, self-inflicted.
The domination of the company in the EV space slips and, for the first time, Tesla’s position as a leader in the industry is no longer guaranteed. Although this remains a force majeure, it faces an unprecedented convergence of challenges – advanced competition in China, regulatory and political reaction in Europe, and an increasingly complex landscape in the United States, where Musk policy can To disagree with the main attraction of Tesla products.
The 123% tesla actions rally in the past year suggests that investors remain optimistic. But the cracks in the company foundation are widening. If Tesla cannot reverse its collapse of sales and sail in the geopolitical and ideological mines field in which Musk has inserted it, it can be faced not only with a temporary slowdown, but to an existential crisis.
The world in which Tesla has prospered is changing. The real question is whether Tesla can change with it.
