MW This chart captures Tesla's EV sales woes - and things are about to get worse
By William Gavin
U.S. sales have fallen further from their 2023 peak, and Elon Musk has already told investors to brace for a 'few rough quarters'
Tesla is dealing with sales declines in the U.S., and in much of the rest of the world as well.
Tesla is on track for its worst U.S. sales performance since 2022, and that's not the only region where the electric-vehicle maker is under pressure.
The Austin, Texas-based company is projected to sell 125,937 electric vehicles in the U.S. between October and December, according to estimates from industry research firm Cox Automotive. That would make for a decline of more than 22% relative to a year before, when Tesla $(TSLA)$ sold 162,388 units.
It would also bring the total number of EVs that Tesla delivered in the U.S. this year to 577,097, an 8.9% drop versus 2024. Tesla's share of the overall U.S. automotive market is expected to have declined by half a percentage point, to 3.5%, according to the Cox estimates.
Part of that relates to an industrywide issue that's forcing dramatic changes across the landscape. Dampening demand for EVs has prompted Ford Motor $(F)$ to cancel its plans for several models, while General Motors $(GM)$ is laying off some workers.
The federal government recently rolled back fuel-economy rules that encouraged selling more eco-friendly vehicles, and the U.S. ended a tax credit that previously incentivized EV purchases.
In November, the average price of a new EV was $58,638, a 3.7% increase compared to a year earlier, but slightly down from October, according to Kelley Blue Book. The value of incentives, or the discounts and deals companies use to lower prices, rose 20% last month when compared to October.
The industry is set to sell roughly 230,000 EVs in the U.S. during the December quarter, down from 364,000 during the same time in 2024, according to Cox's estimates. Sales volumes are expected to continue to fall over the next few quarters, as the industry and consumers adjust to the lack of the $7,500 EV tax credit.
CEO Elon Musk acknowledged as much on an earnings call in July, saying Tesla could have a "few rough quarters" as a result.
Tesla's problems don't stop at home. It's also facing headwinds in China and Europe. Altogether, the company could its see second straight annual sales decline.
Through October, Tesla took a 39% year-over-year sales hit in the European Union, according to the latest data from an industry group. The decline has been most stark in a handful of countries, such as Germany, where deliveries are down 48% year over year as of the end of November. In the Netherlands, Tesla sales are down by about 94% through last month compared to a year earlier.
Analysts attribute some of Tesla's poor performance to outrage over Musk's embrace of far-right political figures in Europe and the U.S., which sparked protests earlier this year. The company is also grappling with competition from domestic automakers and Chinese companies that can afford to sell cheaper EVs.
"Europe is still a mess," said CFRA analyst Garrett Nelson, noting that "there's still a lot of distaste" for the Tesla brand.
That's why Tesla earlier this month introduced a less expensive Model 3 sedan it described as having an "ultra-low cost of ownership," starting at EUR37,970 in Germany. However, that vehicle and a similar trim for the Model Y SUV still cost more than offerings from rivals like BYD (CN:002594).
BYD and others are also giving Tesla trouble in China, even though it's been more "resilient" in that market, according to Nelson. November marked Tesla's third month of year-over-year sales growth in the world's biggest automotive market.
That's partially thanks to Tesla's recent introduction of new Model Y and Model 3 trims, a strategy that the company has repeatedly used to drum up interest in its aging vehicle lineup. It's introduced at least three new variations of those vehicles this year.
Tesla, like other EV sellers, is benefiting from Chinese consumers' rush to take advantage of a tax credit that expires at the end of the year. The company also increased its end-of-year incentives.
Overall, though, deliveries are down by more than 8% through November, according to the Chinese Passenger Car Association. Meanwhile, new rivals like Xiaomi and other more established rivals have increased their sales this year.
-William Gavin
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(END) Dow Jones Newswires
December 17, 2025 18:06 ET (23:06 GMT)
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