The Tesla Model Y is not only the bestselling EV in the U.S. market but, in Europe, it has become the bestselling vehicle overall. For 2023, it became the first EV ever to capture the Continental sales crown.
With production at its big factory in Berlin now fully ramped up, Tesla was able to meet growing European demand for EVs last year — so much so that the automaker’s Model Y crossover became the first battery-electric vehicle ever to become the EU’s bestselling vehicle overall.
But competition is heating up in the EV sector, especially at the lower end of the price spectrum from Chinese imports. And Tesla only narrowly squeaked out a victory in the sales race, ahead of the Dacia Sandero, one of the Continent’s most affordable, gas-powered offerings.
A year of firsts
European buyers purchased 254,822 of the Tesla crossovers last year. And it led the sales charts in seven out of the 12 months, according to market research firm Dataforce. According to trade publication Automotive News Europe, the Model Y scored a number of other firsts:
- It was the first midsize vehicle to top the EU sales charts; and
- It was the first premium vehicle to be number one;
- The Tesla also was the first non-European model to be number one overall in decades.
A costly victory
The Model Y’s win didn’t come cheap. Tesla has repeatedly cut prices since early 2023. In the U.S., it did so to counter the loss of federal tax credits on some products due to the rule changes under the Inflation Reduction Act of 2021.
In Europe, it has taken similar steps to stay ahead of growing competition. That includes new offerings from domestic brands like Volkswagen, as well as Asian imports like BYD.
But those price cuts have hit Tesla at the bottom line. It has seen a sharp reduction over the past 12 months in its profit margins, resulting in weaker overall revenues and earnings than originally forecast.
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A tight race
Tesla narrowly edged out Dacia for the 2023 sales win. Its little Sandero – a Romanian-made hatchback – generated $235,893 sales in the EU. It’s one of the cheapest models available in Europe, at around 12,000 Euros, or just over $13,000 at current exchange rates.
In 2022, Sandero was the overall winner, Dacia delivering 200,736 of the hatchbacks, compared with 137,608 Model Y crossovers.
But Tesla is facing a wave of competition in the EV market, as well. Some of the most challenging comes from China, brands like BYD and Great Wall eyeing opportunities in the European market.
Several other automakers are looking for opportunities to break Tesla’s grip, as well, with products like the Renault Clio and Opel Corsa.