Tesla is in trouble, and this time, it’s not just about Elon Musk‘s latest headline-making moment. The company’s electric vehicle sales are dropping fast, and that could put billions of dollars in revenue from a different part of the business at risk (along with its ability to compete in the EV market), as reported by Futurism.
What’s happening?
Tesla’s sales in Europe have taken a serious hit. In Germany, sales fell a staggering 76% in February compared to last year, according to Reuters. In France, they were down 26%.
According to Politico and Carbon Credits, the drop could also mess up a deal it made with carmakers like Toyota and Stellantis. Tesla sells carbon credits to these companies, helping them meet strict pollution rules in Europe. Last year, Tesla made $2.76 billion from these deals, a 54% jump from the year before. But if Tesla isn’t selling enough cars, it won’t have enough credits to sell, either.
Why does this matter for EV buyers?
If the company loses billions in carbon credit revenue, it might try to make up for it by raising prices or cutting costs in ways that hurt customers, like slower repairs or fewer upgrades.
On that note, Chinese automakers like BYD (Build Your Dreams), Nio, and XPeng are making cheaper electric cars with newer tech and features. Some models come with better driver-assist systems and fast charging, which is a big deal for buyers. BYD even passed Tesla as the world’s top EV seller at the end of 2023, proving how much things are shifting — and Tesla’s sales have now started dropping in China too, with a reported 28.7% drop across January and February year-over-year.
At the same time, some Tesla customers are stepping away from the brand because of Elon Musk’s behavior and politics. Lately, Tesla has been dealing with protests at dealerships, more canceled orders, and a wave of social media backlash. Some longtime fans have said they’re done supporting the company because of Musk
On top of that, a slowdown in Tesla’s sales could hurt the broader shift to EVs. Fewer people might switch from gas cars to electric ones, which isn’t great for efforts to cut pollution and address rising global temperatures.
What are some alternatives?
Plenty of other automakers are making reliable and affordable electric cars. Honda, Acura, Hyundai, and Kia are among brands that have been putting out EVs that compete with Tesla in range and price like the Prologue, ZDX, Ioniq 5, and EV6.
Ford’s Mustang Mach-E and F-150 Lightning have become increasingly popular choices, and Volkswagen’s ID.4 is another hot pick, with the company also releasing a Volkswagen Bus-inspired ID.Buzz and investing in up-and-coming EV truck brands Rivian and Scout.
For budget-friendly options, BYD and UK’s MG Motor are rolling out lower-cost models that are gaining traction, though they may not be available in all markets. Nissan’s Leaf and Chevy’s Bolt remain the top low-cost EVs in the U.S., with both retailing well under $30,000 and good driver satisfaction marks.
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More companies are rolling out electric cars every year, and competition is making them cheaper and better. It’s probably not a good idea to bet against Tesla in turning around its fortunes, but either way, drivers still have plenty of choices to go electric.
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