BYD sales surge in Europe as Tesla faces ongoing struggles

Chinese automaker BYD saw its vehicle sales increase by 58% in the first three months of the year, presenting a stark contrast to the ongoing decline in demand for Tesla’s electric vehicles across Europe.

The Shenzhen-based group announced on Tuesday that it delivered 986,098 passenger vehicles in the first quarter. Of these, 416,388 were pure electric vehicles, marking a 39% increase. Enjoying a strong start to the year, BYD’s annual sales surpassed $100 billion for the first time, boosted by a resurgence in demand for hybrid vehicles within its domestic market.

Meanwhile, analysts have issued warnings that Tesla’s first-quarter deliveries, anticipated this week, are likely to show a decline exceeding 10%. This prediction comes as sales in France and other key European markets continued to fall in March, even following a significant model update.

Norway offered a glimmer of hope. The new Model Y, launched in the first week of March, reclaimed its position as the country’s best-selling car after experiencing two months of sharp decline. Vehicle registrations in Norway recovered substantially following a 48% drop in February, decreasing by only 1% to 2,211 vehicles in March.

Tesla began delivering the upgraded Model Y, its most popular model, in China at the end of February and rolled it out across Europe starting in early March. Despite this, official data released on Tuesday revealed that new car sales in France plummeted by 37% year-on-year in March, down to 3,157 vehicles. Similarly, sales in Sweden experienced a significant drop of 64%, falling to just 911 units.

Tesla sales have faced a considerable downturn in Europe since the start of the year. According to the Financial Times, analysts remain divided on the primary cause, debating whether the slump stems mainly from public reaction to CEO Elon Musk’s pronounced involvement in regional politics or from an aging product lineup.

Even before the release of March’s sales figures, analysts were already revising down their forecasts for Tesla’s first-quarter deliveries, which are typically announced around the second day of April.

Last week, Deutsche Bank reduced its forecast by approximately 50,000 vehicles, bringing the estimate down to 345,000 units. This figure represents an 11% decrease compared to the same period last year. In contrast, RBC Capital Markets anticipates deliveries reaching 364,000 units.

In a note, Deutsche Bank analyst Edison Yu remarked, “Beyond the numbers, we feel that there has been some brand damage in Western Europe and pockets of the US or Canada due to Elon Musk’s political activities, which is hurting demand.”

Tesla vehicles and dealerships have reportedly become targets of protests in both the US and Europe. This follows Musk’s unprecedented engagement in European political discourse and perceptions of his significant influence within the White House sphere.

Many believe Tesla is well-positioned among automakers to navigate potential tariff conflicts initiated by Donald Trump, largely due to its substantial manufacturing presence in America. Nevertheless, the company remains exposed to risks, as it sources a portion of its vehicle components from international suppliers outside the US.

The company recently issued a warning, suggesting that Trump’s proposed tariffs could potentially trigger retaliatory tariffs against the US. Such a scenario could increase the cost of manufacturing vehicles within America, impacting Tesla’s operations.