In the first quarter of the year, China’s BYD saw a remarkable 58% increase in vehicle sales, sharply contrasting with a predicted drop in demand for Tesla’s electric cars, especially in Europe. This shift highlights a growing disinterest in Tesla’s brand among European consumers.
BYD, based in Shenzhen, announced on Tuesday that it delivered 986,098 passenger vehicles during the first quarter, with 416,388 of those being all-electric vehicles (EVs), marking a 39% increase. This strong performance follows the company’s record-breaking annual sales, surpassing $100 billion for the first time, fueled by rising demand for hybrid vehicles in China.
The company’s success has been driven by robust domestic sales of hybrid cars and aggressive expansion into international markets.
In contrast, analysts are predicting that Tesla’s first-quarter sales, to be released on Wednesday, will show a decline of more than 10%. The drop is mainly attributed to weaker demand in European markets such as France, despite an upgrade to one of Tesla’s key models.
Tesla’s sales have been declining in Europe since the start of the year. However, experts remain divided on whether this decline is due to backlash against CEO Elon Musk’s political actions or a combination of an aging product lineup and increasing competition.
Even before the March sales data is published, analysts have been revising their expectations for Tesla’s first-quarter deliveries. Deutsche Bank reduced its forecast by approximately 50,000 units, now projecting 345,000 vehicles, an 11% decline compared to the previous year. RBC Capital Markets anticipates 364,000 units sold.
Deutsche Bank analyst Edison Yu noted, “Beyond the numbers, there seems to be some brand damage in Western Europe and certain parts of the US or Canada, potentially linked to Elon Musk’s political involvement, which is negatively impacting demand.”
Tesla’s vehicles and dealerships have become targets of protests in both the US and Europe, following Musk’s controversial political statements and influence in the White House.
Tesla is still considered one of the best-positioned carmakers to navigate President Donald Trump’s tariff war, thanks to its strong manufacturing presence in the US. However, the company is vulnerable as it sources some vehicle components from overseas.
Recently, Tesla warned that Trump’s tariffs could subject it to retaliatory measures, raising the cost of manufacturing vehicles in the US.
The company began delivering its upgraded Model Y, its most popular model, in China in late February and in Europe in early March.
In March, new car sales in France dropped by 37% to 3,157 units, while in Sweden, they plummeted by 64% to just 911 vehicles, according to official data released Tuesday.
