Tesla Inc TSLA experienced a significant drop in new car sales in Europe. This decline comes despite an overall increase in vehicle registrations across the region.

Market Performance Overview: Data from the European Automobile Manufacturers Association (ACEA) indicates that Tesla’s sales plummeted by 28%, resulting in its market share shrinking from 2.9% to 2%. Meanwhile, the market for new Battery Electric Vehicles (BEVs) in Europe grew by 17.1%, with BEVs, Hybrid Electric Vehicles, and Plug-In Hybrids representing over 59.2% of new vehicle registrations, according to a report by Reuters.

In contrast, other automakers performed well; Volkswagen AG saw registrations rise by 10.3%, while Renault reported a 13% increase. However, Stellantis NV STLA experienced a 5.9% decline in sales. Notably, Hybrid vehicles continue to dominate the market with over 35.5% of new registrations.

Implications for Tesla’s Future: The decline in sales coincides with a drastic 71% year-over-year profit decrease for Tesla. The company plans to announce new, more affordable models during its Q1 2025 earnings call. Some industry experts caution that this strategy might lead to negative outcomes for the brand.

Tesla has also altered its marketing strategy for the Cybertruck, now promoting it as a versatile lifestyle product capable of handling construction materials and rugged terrain. A more affordable version of the Cybertruck was recently revealed.

CEO Elon Musk expressed renewed commitment to the company during a recent earnings call, which helped boost investor confidence. Following this call, Tesla’s stock saw a 5% increase in after-hours trading.

Despite the current downturn, industry analysts remain optimistic about Tesla’s prospects. Investment bank Piper Sandler has raised its price target for Tesla’s stock to $400, and Dan Ives has increased his target to $350.

According to Benzinga Edge Stock Rankings, Tesla maintains good scores across multiple performance metrics, only falling short in terms of Value.

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