Tesla’s sales in France in July 2024 experienced an unprecedented plunge. What are the reasons behind this?

Selling a third fewer cars than a year ago is no mere cough, but a true pneumonia. The Tesla machinery is stuck, and the diagnosis has been known for months. In France, several explanations account for this situation.

The first concerns the instability of the Tesla house of cards, whose structure relies too heavily on too few models: the aging bestseller Model Y soon to be updated and the Model 3 sedan produced in China. The other models are anecdotal.

This last detail is not insignificant: since July 4, 2024, the European Union has imposed new increased customs fees for electric cars produced in China. As a result, the selling price of the Model 3, assembled in Shanghai, has risen (modestly) by about 1500 euros in Europe at that date. Meanwhile, since January 2024, France has removed eligibility for the 4000-euro ecological bonus for cars with distant production due to their poor carbon footprint (shipping by boat).

The Model Y is also plummeting

Regarding the bestseller Model Y, the customer is confused. The arrival of a Long Range Propulsion version priced at 42,990 euros (after bonus deduction, as it is produced in Germany) has caused confusion. Which trim to buy now? Tesla is multiplying promotions on the once-great base Propulsion version, which now seems outdated.

Furthermore, the prospect of its replacement at the end of 2024 does not encourage customers to buy a car that will quickly become outdated and whose resale value will plummet.

A Complicated Competitive Context

Competition in the electric vehicle sector has intensified. Many European manufacturers, such as Renault with its new electric range and Volkswagen with its ID series, have gained popularity. These local brands offer electric vehicles at often more competitive prices and with attractive tax incentives for French consumers. Not to mention the complete absence of advertising to gain recognition.

Tesla has also faced challenges at the production and logistics level. Delays in the global supply chain have disrupted vehicle production, leading to longer than expected delivery times. French consumers, faced with prolonged wait times, have turned to alternatives that are more readily available.

Moreover, some reported quality issues on recent Tesla models may have deterred potential buyers. Complaints regarding interior finishes and software malfunctions have circulated on social media and in the media, tarnishing Tesla’s brand image among discerning consumers.

Future Prospects

The 34% drop in sales in July 2024 is a wake-up call for Tesla, but the brand still has solid strengths to rebound. The transition to greener mobility remains a priority for many countries, including France, and Tesla remains a major player in this transformation.

However, to regain market share, Tesla will need to not only overcome current challenges but also anticipate the expectations of French consumers regarding sustainability, innovation, and value for money. The competition remains fierce, and only time will tell if Tesla can regain the trust and enthusiasm of buyers in France. As long as the 25,000 euro car is not launched, the horizon will remain bleak for the American manufacturer.

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