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Gloucestershire Business News

SPECIAL REPORT: Tesla hits a sales pothole

Global EV dominator Tesla delivered 386,810 cars to customers in the first three months of 2024, marking a 9% decline in momentum amid a host of claimed reasons for the stutter.

In the same period of 2023, sales topped 423,000. Tesla has pointed the finger at loss of supply continuity during an update of the main-seller Model 3 as well as the disruption on shipping in the Red Sea triggered by Israel's war on Gaza.

An arson attack on a German plant is also cited as a negative factor during the sales period. Shares fell on Wall Street by almost 6% as a result of the figures, leading to a $35bn evaporation on the company's value - the move hardly being helped by Tesla's accompanying production figures, which indicate that factory gate tallies fell from 430,808 cars to 433,371.

But beyond specifics cited by Tesla, a new landscape is emerging as the global EV market speeds up, with China leading an aggressive push to undercut rivals.

As reported in Punchline-Gloucester.com, Build Your Dreams (BYD) is parking its new product  on Tesla's front lawn and reinforcing an aggressive Far-East marketing message established by MG Motor, while European makers are also attuning to the need for EV options which can leverage a sceptical audience through raw money appeal.

Late last year, BYD's muscling in on the EV market was seen as the main reason for Tesla lopping zeroes off many of its price options, a fact broadly acknowledged as a key reason for its Tesla's current shares issue.

Signalling that Beijing better not relax though, BYD's Q1 sales have dipped to 300,1114, while Europe's car industry appears to be waking up to the message that price, rather than a green halo, will be the key for success in 2024.

Renault's budget brand Dacia opened order books for the Spring last month, a model that puts zero-emissions motoring into the hands of new drivers for prices that start at a record-shattering £14,995 – a move that will send Chinese rivals scuttling back to their calculators.

Despite Tesla's woes and the changing reasons for us buying EVs though, the market will grow, come what may. Only last month, UK energy consultants at Greenmatch delivered a report which declared that "we stand on the precipice of a new era in transportation, the EV market is accelerating at an unprecedented pace."

By the end of this year, the report predicted that the world will see 17m registrations of new passenger car EVs, equating to a hearty quarter of the sales pie. Greenmatch added: "The global EV market, valued at £291.5 billion in 2023, is projected to more than double to £714.9 billion by 2030."

For Tesla, which has built its brand upon premium values, a rush to the bottom on price does not sit comfortably with its marketing ethos. Here in the UK, morale was pumped by the recent delivery of the 200,000th car, but the Q1 tally for this year was the lowest since 2020.

While headline prices for EVs are set to come down this year, some analysts in the USA have predicted Tesla is running out of road when it comes to early adopters - or perhaps those remaining first-timers who aren't waylaid on the way to Tesla by the shine of cheaper options.

As Fortune magazine asked in November: "If he doesn't find a steady number that are willing to make the switch, the growth rates of the past could be gone... That's why he needs his vehicles to be just as affordable as those offered by Toyota and Honda."

● For many cash-strapped households looking for their next wheels, such issues may seem abstract, but the good news amid changes to the new EV market is that the prices of used EVs are continuing to fall. As secondhand models come through in greater numbers, largely thanks to fleet renewals, value analysts at CAP HPI say that 75% of sales on three-year-old EVs were down in 2023, with only 5% registering a rise. Winners in the sticker war included BMW's iX, which climbed by 2%, and Mercedes-Benz's EQA, which clung onto a 1% rise, while VW's ID3 took a 6.1% fall, Nissan's Leaf dropped by 5.9% and Citroen's C4 in electric guise dropped by 6%.

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