Tesla Faces Slumping Sales and Mounting Challenges as Shareholders Prepare for Major Vote on Musk’s Pay
Tesla, the company synonymous with electric vehicles (EVs) and led by the often controversial Elon Musk, is approaching a critical moment. Tomorrow, the company’s shareholders are set to vote on whether to award Musk a massive new compensation package. If approved, the deal could make him a trillionaire, reinforcing his leadership at a time when Tesla’s core business is facing significant headwinds.
**Plummeting Sales Across Europe and China**
Perhaps the most pressing issue for investors is Tesla’s dramatic drop in sales across key markets. Although Tesla generally reports its sales quarterly and does not break down figures by country, registration data from various European nations paint a worrying picture for October 2024. Compared to the same month the previous year, Tesla’s sales have plummeted by double-digit percentages in nearly every major European market.
The declines are stark: sales fell by 89 percent in Sweden, 86 percent in Denmark, 69 percent in Belgium, 68 percent in Finland, 65 percent in Austria, and 60 percent in Switzerland. Other major markets saw similar drops: Portugal was down 59 percent, Germany 54 percent, Norway 50 percent, the Netherlands 48 percent, the UK and Italy both 47 percent, and Spain 31 percent. The only bright spot in Europe was France, where a new government subsidy helped Tesla eke out a 2 percent yearly gain.
China, Tesla’s other major market outside the US, offered little solace. Sales there dropped by nearly 10 percent in October year over year. While not as catastrophic as the declines in Europe, this is still a concerning trend given China’s importance to Tesla’s global ambitions.
**Intensifying Competition and a Stale Product Lineup**
A key factor behind Tesla’s declining sales is intensifying competition. In both Europe and China, the EV market has evolved rapidly. Established automakers are now offering competitive electric models, while a wave of innovative Chinese startups is further crowding the market. Tesla’s lineup, by contrast, has stagnated. The company continues to rely heavily on the Model 3 and Model Y—vehicles that, despite recent updates, are starting to look dated in a fast-moving market.
Tesla’s much-discussed product pipeline appears worryingly thin. The company’s chairperson, Robin Denholm, recently admitted that even the much-hyped “Cybercab”—a proposed two-door, two-seat EV—would require a steering wheel to be viable for most customers. However, the vehicle’s limited space and unconventional design have raised doubts about its mass-market appeal, especially compared to practical Japanese Kei cars or European microcars.
Other new products remain elusive. The second-generation Roadster, originally teased nearly a decade ago, has yet to materialize beyond concept art. The Tesla Semi, a heavy-duty electric truck, has been introduced but faces an uncertain future in North America, especially amidst