In Europe, Tesla Loses Ground
In the extremely massive market of Europe, which previously was a key strength of the American EV company Tesla, now released new results showing bad signs for Elon Musk's vehicle company which operates overseas.
Tesla earnings reports from recent quarters has showed slowing growth in the European region, especially in Western Europe (Germany, France, Belgium, etc.) where local competition has showed impressive resistance to the pervasiveness of the foreign American company. Volkswagen and BMW, two German-based automobile manufacturers that have recently set their sights on the electric vehicle market, meanwhile, has showed record gains in the EV exclusive market in Europe, showing that perhaps much of Tesla's revenue from previous quarters is siphoning over to new players in the industry.
There could be many reasons attributed to this phenomenon. Although the Tesla brand is known for being a reliable EV producer, its products are oftentimes deemed overly expensive by consumers. The prices of these Tesla models has surged even more as a combination of European tariffs on American products and vice versa has put strain on the prices of the materials necessary for assembling every Tesla (like aluminum, lithium, and steel) and subsequently the Tesla itself. With many individuals in Europe still unable to afford expensive cars as a result of the fallout of the COVID-19 pandemic, Tesla models have become more out of reach for average European consumers who are now looking at more cheap home companies who offer similar products in terms of quality.
In addition, the reputation of Tesla has drastically deteriorated due to sweeping political events. Its CEO and biggest shareholder, Elon Musk, has has very publicly known ties with the new administration in the U.S. executive branch which has waged war on all kinds of trade partners, especially the European Union. They have taken part in massive trade wars started by levying tariffs against even America's closest allies, which has resulted in much backlash from foreigners pessimistic about America's retreat from the global space. Europeans have protested rising tariff rates on their own countries by "boycotting" the purchase of Tesla models and other American-made products, instead opting for more domestic items.
Tesla has fallen by over 50% in the matter of a month, more or less since the inauguration of President Donald Trump. Elon Musk has urged investors to hold their stakes in the company as he tries to manage drastically shifting financial markets all across the world. The billion-dollar EV corporation will need to adapt to less of a free market, rising prices, and more difficult trade relations, especially with emerging economies which provide it a strong source of cheap labor.
