(NASDAQ:TSLA) shares are under renewed scrutiny after July sales data revealed that the company continues to lose ground in Europe, one of the world’s most competitive electric-vehicle (EV) markets. Rival BYD once again outsold Tesla across the European Union, deepening concerns about Tesla’s growth trajectory and long-term valuation.
Competition Intensifies
According to data from the European Automobile Manufacturers’ Association (ACEA), BYD’s new-car registrations in the EU more than tripled year-over-year to 9,698 units in July. Including the U.K., Iceland, Liechtenstein, Norway, and Switzerland, BYD’s total reached 13,503 vehicles.
Tesla’s performance told a different story. Registrations contracted more than 42% to just 6,600 cars across the EU, marking the latest in a string of weak monthly results. December 2023 was the last month Tesla posted growth in the region, with a modest 5.9% increase.
BYD isn’t Tesla’s only threat. State-owned Chinese automaker SAIC Motor also outsold Tesla in July, underscoring how aggressively Chinese firms are expanding with lower-cost, feature-rich models.
Why Investors Care
Tesla’s European struggles arrive at a delicate moment for the stock. The company’s fell 16%, and management has been refreshing its lineup — with updates to the Model Y, Model S, and Model X, along with a cheaper Cybertruck variant — to re-ignite demand.
Despite these efforts, the fact that overall EU battery-electric vehicle sales rose 39% in July, including a 58% surge in Germany, highlights that Tesla’s problems are competitive, not cyclical. Other automakers, including Volkswagen, logged growth, while Tesla lost share in a rising market.
For equity investors, this raises the risk that Tesla’s premium valuation, which prices in long-term dominance, may no longer be justified.
Currency Angle and Global Exposure
The sales decline also has currency-market implications. Tesla generates significant revenue overseas, and any erosion of competitiveness in Europe could weaken its foreign income stream. With the euro holding steady against the US dollar, Tesla doesn’t have the benefit of currency translation gains to offset weaker volumes.
Price Levels to Watch
Tesla stock has traded in a volatile range over recent months, with investors torn between the company’s AI-driven ambitions and its EV demand challenges.
Asset | Current Level | Key Support | Resistance | Outlook |
Tesla | $224.50 | $210 | $245 | Bias lower if EU weakness persists |
18,420 | 18,000 | 18,700 | Tesla underperformance weighs on index |
A decisive break below $210 could open downside risk toward the $190 area, while a rebound above $245 would signal that investors are willing to look past near-term headwinds.
Outlook: Market Patience Wearing Thin
Tesla has weathered competitive threats before, but the scale of BYD’s momentum in Europe suggests this time could be different. Investors are still giving Elon Musk credit for execution in the U.S. and for his push into AI and autonomous driving, but the numbers from Europe are hard to ignore.
Unless Tesla can stabilize sales in the EU while maintaining margins, the stock may face further downside pressure, particularly if broader equity markets continue to rotate into sectors that benefit more directly from .