Tesla’s Model Y is selling well in Europe

The Tesla Model Y has been a top seller in Europe this year, even against a backdrop of increasing competition in the electric vehicle space. The competition will continue to chip away at Tesla’s impressive market share in the coming years, but it’s got an impressive head start in Europe, as led by its flagship electric SUV. 

Tesla launched the Model Y just last year in European countries, and the vehicle topped European sales of both gas and EVs in September, according to Forbes. The victory also has added significance for the U.S. automaker, which is competing with locals such as BMW, Volkswagen and Peugeot. Tesla also recently opened its first factory in Europe.

The Tesla Model Y sold 29,367 units in September in Europe, beating out the second-place seller and internal combustion engine vehicle, the Peugeot 208, which sold just 19,601 units.

Although Tesla now has a Gigafactory in Brandenburg, Germany, many of the automaker’s European deliveries thus far have come from its Shanghai plant as the Grünheide location continues to ramp up production. Tesla’s aim toward globalizing production has allowed it to put pressure on the European auto giants amidst a shift to EVs.

Still, some analysts think Tesla will need to introduce more new vehicles to the market in the coming years to maintain its strength in Europe.

“A big part of the growth posted by any car brand comes from its ability to bring new cars to the market,” JATO analyst Felipe Munoz said. “The last time Tesla introduced an all-new model was in January 2020 when the Model Y production started in the U.S. So, during almost three years, the brand has not come up with anything really new. The focus instead has been on opening new factories around the world to supply the local demand.”

The statements come ahead of Tesla’s plans to introduce a refreshed Model 3 design to the market next year. In the past, Tesla has incrementally made design changes to its vehicles every few years, rather than the traditional automaker style of introducing a new model year version each year.

Compact vehicles remain an important sector for automakers in the European market, and with a new, smaller EV platform in the pipeline, Tesla could be set to aim at this sector in the second half of the decade.

“Tesla’s CEO recently confirmed the company is working on a next-gen platform for smaller electric cars. This new platform’s main focus would be on halving costs and achieving volumes higher than all other models combined,” UBS said in a recent note.

Matt Schmidt of Schmidt Automotive Research pointed out some factors that could continue to inhibit Tesla’s performance in Europe, however, emphasizing the limited deliveries possible as more and more companies ship EVs from China to European countries.

“From 2025 Tesla will begin to come under pressure from European incumbents making a genuine push, with BMW bringing their first genuine models to market based on genuine BEV-only platforms. This is when the real race begins for Tesla. Tesla has a window and they need to make the most of it.”

This and other logistical challenges remain for Tesla’s European presence. However, it’s worth noting that the U.S. is heading into 2023 outperforming the locals — before Giga Berlin has even become fully operational.

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