NOTE: A version of this article was first published on or about Aug. 4, 2020, on my Seeking Alpha Marketplace site.

July month sales numbers from European countries are starting to come in, and things are not looking good for Tesla (TSLA), to put it mildly. As of this writing, we have July month unit sales results from some of the strongest electric vehicle (EV) markets in Europe, in particular, Norway, Sweden and The Netherlands.

Let’s first deal with the newcomer on the European EV scene, the Polestar 2. What’s the Polestar 2, you might ask?

Polestar is a joint venture between Geely and Volvo Cars. Volvo Cars is in turn substantially owned by Geely, soVolvo Cars and Geely are all practically the same, sort of like Kia and Hyundai are the same in reality. The marketing organization is different, as are some design elements.

The Polestar 2 is not the first made-in-China car to be sold on U.S. soil. Volvo itself had two cars made in China that were sold in the U.S. a few years ago. General Motors had two cars, made in China, sold in the U.S. in the last few years.

But today we are talking about three of the first countries in Europe to report July month unit sales results, and they happen to be three of the most important EV markets in Europe. So how did the Polestar 2 do when compared to the EV darling, the Tesla Model 3?

Europe July

Tesla Model 3

Polestar 2

Norway

22

17

Sweden

5

50

Netherlands

31

15

TOTAL

58

82

Data source: EV registration statistics for The Netherlands, Norway and Spain and Nyregistreringar

As you can see in the table above, two things are true:

  1. The absolute numbers for both cars are ridiculously small.

  2. Polestar 2 outsold the Tesla Model 3.

You may wonder: How do these Tesla Model 3 unit sales numbers in the three European countries compare to a year ago?

Model 3

July 2020

July 2019

change

Norway

22

308

-93%

Sweden

5

148

-97%

Netherlands

31

590

-95%

TOTAL

58

1046

-94%

Data source: EV registration statistics for The Netherlands, Norway and Spain and Nyregistreringar

As you can see in the table above, we are looking at an impressive growth company here: Minus 94%. In comparison, this is a lot worse than AOL’s dial-up modem subscriber decline two decades ago. Tesla’s “growth” in these geographies is negative and is rapidly approaching oblivion.

But wait, there’s more! Tesla’s more expensive cars, the Model X and Model S, also have fully electric competitors from Audi, Mercedes and Porsche, among others. How does the less expensive Model 3 stack up against those more expensive EVs?

Europe July

Tesla Model 3

Audi eTron

Mercedes EQC

Porsche Taycan

Norway

22

698

655

105

Sweden

5

138

72

88

Netherlands

31

172

53

83

TOTAL

58

1008

780

276

Data source: EV registration statistics for The Netherlands, Norway and Spain and Nyregistreringar

As you can see in the table above, it’s not exactly a close call. Porsche Taycan outsold the Tesla Model 3 by approximately 5:1, the Mercedes EQC 13:1 and the Audi eTron 17:1. And yes, the Audi eTron includes the Sportback versions (50 and 55) for obvious reasons.

I’m not sure that these numbers can get any worse for Tesla, so I fully expect Tesla’s Model 3 sales numbers in Europe to improve from the July month fiasco. Still, it’s also not clear that Tesla hasn’t lost the sales plot forever in Europe. Polestar, Audi, Mercedes, Porsche and many others will continue to eat into the Model 3’s flesh like hyenas feasting on a wildebeest.

Tesla is valued like a growth company with dominant market share. Here are the Tesla Model 3 sales numbers in Europe overall (not just the three countries discussed above):

Europe

Tesla Model 3

Total EV sales

Tesla M3 %

Jan 2019

0

33431

0%

Feb 2019

3757

32671

11%

Mar 2019

15771

59741

26%

Apr 2019

3738

37111

10%

May 2019

2489

37399

7%

Jun 2019

11604

47384

24%

Jul 2019

3478

35838

10%

Aug 2019

5286

35278

15%

Sep 2019

17490

58662

30%

Oct 2019

1767

48219

4%

Nov 2019

7380

55033

13%

Dec 2019

22137

77248

29%

Jan 2020

1517

74663

2%

Feb 2020

3589

69538

5%

Mar 2020

16121

84349

19%

Apr 2020

2461

31500

8%

May 2020

2278

46805

5%

June 2020

7224

92880

8%

Data source: EV Sales

As you can see in the table above, 2020 has been a disaster for Tesla. EV market share has ranged from 2% to 8% in all months except for one. We don’t have the July numbers for all of Europe yet, obviously, but that will come in about three weeks from now. I expect Tesla’s July numbers in Europe to be very, very low, even by these standards.

So what about the world overall for Tesla – Model 3 as well as total?

Global

Tesla Model 3

Tesla total

Total EV sales

Tesla M3 %

Tesla total %

Jan 2019

7277

10340

153695

5%

7%

Feb 2019

10436

14050

111541

9%

13%

Mar 2019

33187

38084

224335

15%

17%

Apr 2019

17464

20823

166200

11%

13%

May 2019

17965

23156

179270

10%

13%

Jun 2019

39632

48788

264591

15%

18%

Jul 2019

19057

23284

148144

13%

16%

Aug 2019

21336

26758

157696

14%

17%

Sep 2019

39201

49821

183393

21%

27%

Oct 2019

13359

16565

149552

9%

11%

Nov 2019

25878

31337

176547

15%

18%

Dec 2019

53742

63148

279214

19%

23%

Jan 2020

10013

12779

150613

7%

8%

Feb 2020

13661

16276

116170

12%

14%

Mar 2020

48788

60131

192380

25%

31%

Apr 2020

11761

14793

110274

11%

13%

May 2020

20847

24607

144600

14%

17%

Jun 2020

35854

49765

229894

16%

22%

Data source: EV Sales

As you can see in the table above, the global sales numbers look a bit better for Tesla. Why? China and North America. Actually, it’s all China, but we don’t have great numbers to break them down at this point. In any case, the extreme weakness in Europe is balanced by Tesla’s strong growth in China during the first half of 2020.

Conclusion: Polestar 2 beats Tesla Model 3

This is just an example. While we can see that Audi eTron, Mercedes EQC and Porsche Taycan beat the Tesla Model 3 in three of the most important countries in Europe, we now add yet another new car to that list: Polestar 2, which is made in China but exported globally.

It’s just more hyena joining the dinner party, feasting off Tesla’s EV market share. In a couple of years, there won’t be much left. Just like AOL’s dial-up modem business two decades ago, when broadband (cable modems and DSL) overtook the home Internet access market.

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Disclosure: I am/we are short TSLA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: At the time of submitting this article for publication, the author was short TSLA. However, positions can change at any time. The author regularly attends press conferences, new vehicle launches and equivalent, hosted by most major automakers.

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