✂️ Tesla's sales were halved

What’s going on here?

Tesla’s European sales fell 49% between this April and last, slicing the EV maker’s regional market share in two.

What does this mean?

Europe as a whole recorded 28% more EV sales this April than last, with hybrids now making up over half of all new car sales. But buyers aren’t treating eco-orientated brands equally. Tesla’s European sales fell for the fourth month in a row in April, leaving the firm’s market share at 0.7% – about half of the 1.3% from a year ago. Drivers have been attracted to hybrid models and cheaper cars recently – not ideal for Tesla, which only makes fully electric cars with thick price tags. Still, the stock rallied nearly 5% after the news, with investors seemingly more focused on the robotaxis of tomorrow than the dire sales of today.

Why should I care?

Zooming out: Tesla’s trash may be Europe’s treasure.

European carmakers have a chance to scoop up some of those local, ex-Tesla drivers, but their road to success in the States is less clear. Europe’s policymakers only have until July 9th to negotiate tariffs with the US president. If they can’t agree, up to $321 billion worth of transatlantic trade – more than 10% of which comes from vehicles – could suffer the consequences. Investors, then, need to look out for companies that can protect their profit from the effects of increasing Chinese competition and unpredictable tariffs.

The bigger picture: European stocks trumped American ones – no pun intended.

Europe’s MSCI index has risen 9.4% this year, showing up the S&P 500’s flatline. (Account for currency changes – the US dollar has fallen roughly 10% against the euro this year – and American investors would actually have made returns of around 20% from that European index.) See, despite tariff threats and increasingly complicated international trade, Europe has attracted investors’ attention: its economy is more stable, interest rates are lower, and stock prices are cheaper versus the States.

What’s going on here?

As the “Made In China 2025” campaign nears its end, the Chinese government is reportedly drafting plans to promote self-sufficiency over the next number of years.

What does this mean?

Announced in 2015, the campaign was designed to reduce China’s reliance on international trade and boost local manufacturing. That decade has now almost been and gone. So, looking forward, the Chinese government is said to be considering a more low-key version of the same plan. It’ll likely bolster high-tech industries like EVs, robotics, and semiconductors – not least because the US is still restricting exports of its smartest chips.

Why should I care?

For markets: Do rest on your laurels.

China’s priorities make sense. The country’s manufacturing and industrial sectors are the biggest contributors to its economy, after all. (In fact, yearly investment in the two areas is double the amount seen in the US.) Meanwhile, consumer spending only makes up some 40% – noticeably lower than the 50% to 70% typically seen in more advanced economies. And don’t expect that figure to increase anytime soon: the government has admitted that it lacks the tools to coax folk into spending more. That could be problematic for firms all around the world. If Chinese shoppers aren’t encouraged by the government’s financial incentives, they might pull back from buying all kinds of nice-to-haves.

Zooming out: China’s self-sufficiency is the world’s deficiency.

China’s premier EV maker, BYD, has been able to trim prices by up to a third, padded by government subsidies. That’s helped it steal price-conscious customers from rival brands. BYD even outsold Tesla in Europe for the first time in April – while maintaining thicker margins, too. Investors, take note: with Chinese firms selling competitive tech at even more competitive prices, only those with pricing power, strong branding, and industry-leading innovation will keep up.