From Market Leader to Market Loser: The Fall of Tesla

Few would’ve predicted Tesla’s rise to EV dominance prior to the 2012 launch of the Model S. Global sales peaked at 1.8 million in 2023, with the Model Y taking the crown as the best-selling EV around the world. It seemed like no other brand would be toppling Elon Musk’s pioneering trillion-dollar brand any time soon.

Then came the public flirting with Donald Trump, who opened the door to a potent new opportunity for power and prominence.

Musk’s ascent into the Oval office might’ve landed him a high-ranking position in the United States, but recent actions, from the infamous “definitely-not-a” Nazi salute, to his open support for the radical far-right AfD party in Germany, may not have done his global image any favours long term. Time will tell. But meantime Tesla is feeling some fallout.

Protests and boycotts erupted around the world, particularly in Europe, where Musk has been politically ‘vocal’ - in France, Germany and the UK. “Don’t buy a Tesla” read the message in the sands of a Welsh beach, while Tesla Takedown UK activists have vowed to “tank Tesla’s stock”.

Across the EU, Tesla sales plunged by 44% in February, with Germany seeing a staggering 70% drop. In the UK, January’s sharp 45% decline painted a bleak picture, but February brought a 21% rebound, suggesting that perhaps the UK might be somewhat more forgiving than its European counterparts.

But, while it would feel like some kind of vindication to pin Tesla’s decline entirely on Musk’s spiral into far-right extremism, there’s another, arguably bigger issue at play. Tesla’s failure to innovate.

While Chinese automaker BYD, Hyundai, and even legacy automakers like Volkswagen and BMW have rapidly expanded their EV lineups, Tesla’s approach has been stagnant, with some minor updates to the Model Y and Model 3. The only new addition in recent years? The long-delayed, hilariously impractical Cybertruck, an overpriced Frankenstein monster of a car.

Meanwhile, competitors have not just caught up but, in many cases, pulled ahead. BYD, for example, has successfully tapped into multiple market segments with its growing portfolio, recently launching its premium Yangwang brand and budget-friendly Seagull hatchback. Hyundai and Kia have doubled down on innovative, mass-market EVs like the Ioniq 5, Ioniq 6, and EV9. Even mainstream European manufacturers like Peugeot and Renault have rolled out stylish, competitively priced electric models aimed squarely at the mass market.

Looking at BYD in particular, its UK sales saw a major surge in 2024, rising 658% to over 8,700 units sold, and 60 retail sites established, up from 14 the year prior.

Additionally, Tesla’s once-unrivalled Supercharger is no longer an exclusive advantage, with other brands collaborating on expanding fast-charging infrastructure. BYD’s upcoming five-minute ‘Flash Charger’ claims to charge four times faster, even.

The result? A market that’s moving on while Tesla stands still.

And as consumer preferences evolve, so does the broader question: If Tesla no longer leads in innovation, pricing, or public perception, what’s left to justify its premium positioning?

This isn’t to say that Tesla was already on course for the sudden decline we’ve witnessed this year before Musk took charge of the Department of Government Efficiency (DOGE) According to Electrifying.com, 59% of EV owners and prospective UK owners surveyed sited Musk himself as the reason they wouldn’t buy a Tesla vehicle.

So, is this goodbye for Tesla? It’s unclear how the brand will recover from this, but perhaps Musk has already moved on. At the end of the day, Tesla and SpaceX have never really been about revolutionising transport or space travel, Musk critics might argue. They were about building the cult of Musk, fuelling his image as a visionary genius, rather than what he actually is: a billionaire with more money than original ideas.