Tesla's New Challenge: Navigating Europe's Crowded EV Market

Tesla's attempt to penetrate Europe's crowded electric vehicle market with its new budget Model Y SUV and Model 3 sedan faces formidable challenges. The $39,990 Model Y Standard and $36,990 Model 3 are priced higher than many local contenders. European and Chinese brands are offering diverse, cheaper alternatives.

Analysts highlight fierce competition, noting Tesla's dwindling European market share, now at 1.5% since 2023. Contributing factors include an ageing product line and consumer backlash against CEO Elon Musk's political affiliations. Tesla hopes the new pricing will rekindle dwindling sales following a drop in deliveries last year.

In the U.S., Tesla faces uncertainty with the end of a key tax credit, potentially impacting market dynamics. In China, domestic brands overshadow Tesla's offerings in affordability. Despite these hurdles, Tesla holds on by refreshing existing models and banking on brand appeal to sustain and grow its presence.

(With inputs from agencies.)