In Q2, Tesla’s EV Market Share In Europe Cut In Half (NASDAQ:TSLA)

One peculiar aspect of Tesla’s (NASDAQ:TSLA) quarterly reporting is that it’s one of the extremely few automakers that don’t provide any meaningful regional breakdown of its automotive unit sales. This would, at a minimum, mean breaking down into these geographies:

• Europe

• North America

• Asia / China

However, just because Tesla doesn’t provide this data in its quarterly reporting doesn’t mean that it is not available elsewhere – with a little bit of a lag. Approximately one month after, all the European data has been assembled in its entirety.

As a result, we have just now received the final and complete numbers for all of Europe for the month of June – and therefore also the full second quarter. Why is this of particular relevance now, you might ask?

Here’s why:

Elon Musk breaks out the dance moves as he opens new Tesla factory in Germany

Yes, Tesla opened its factory in Germany on March 22, spring-loaded to vastly increase Tesla’s Q2 sales in Europe after its EV market share had dropped dramatically – two-thirds! – from 2019 to 2021:

Europe	EV total	Tesla	% share
2019	558015	110132	20%
2020	1364967	98924	7%
2021	2270263	169709	7%

Data source: 13% Of New Car Sales In Europe Electric (21% Plugins)

The date of Tesla’s German factory opening – March 22 – meant that it was almost perfectly tailor-made to coincide with Tesla having a monster Q2 sales number in Europe. After all, this is Tesla’s first factory in Europe, and it would no longer depend as much on cars exported from California, where Tesla manufactures both Model 3 and Model Y and has the ability to export to Europe. This March 22 factory launch was the obvious rationale for Tesla’s sales going to the moon in Europe in the June quarter.

Tesla’s European EV market share fell from 11% to 5% in Q2

Instead of Tesla’s European EV market share dramatically increasing in Q2 as a result of the brand-new factory near Berlin opening on March 22 (see link above), the opposite happened:

Europe	EV total	Tesla	% share
2022 Q1	566487	59502	11%
2022 Q2	562431	26154	5%

Data source: 13% Of New Car Sales In Europe Electric (21% Plugins)

Whoops! Tesla’s market share fell by (slightly more than) half in Q2. That’s not what you would have expected, given that Tesla’s first European factory opened on March 22.

What about BEV-only sales?

One common objection in talking about Tesla’s EV market share is the very definition of EV itself. The definition of EV is BEV (battery-electric vehicle) + PHEV (plug-in hybrid) = EV. Obviously Tesla’s market share in BEV is higher than in EV because Tesla doesn’t make any PHEVs, unlike some of its competitors.

Yet, the difference in definition between EV and BEV matters more in terms of the absolute level of Tesla’s market share than its direction. If PHEV and BEV sales numbers move equally in the same direction, market share changes for Tesla also will be the same, regardless of the EV definition chosen. Only the absolute level would be different, whether PHEV was included or not.

However, PHEV and BEV sales do not move identically. They may have moved relatively similarly for most of the recent years, but in order to satisfy those who suspect that even the slightest shift in relative sales trajectory between those two versions of EV has had any material impact on the statistical conclusion, I present these BEV-only sales facts:

Europe	BEV	Tesla	% share
2022 Q1	332985	59502	18%
2022 Q2	324112	26154	8%

Data source: 13% Of New Car Sales In Europe Electric (21% Plugins)

See, I told you so: The absolute numbers are higher, but the statistical direction remains almost identical. Tesla’s European BEV-only market share fell by (slightly more than) half from Q1 2022 to the second quarter. In other words, Tesla’s drastic market share fall was approximately the same whether the BEV-only definition was chosen, or the EV definition.

The numbers are even worse than they first seem

Tesla’s Q2 market share collapse in Europe is the kind of faceplant that you would have expected if you had been told that Tesla “closed” its only European factory on March 22 – not opened it on March 22. This was the quarter when Tesla’s European sales were supposed to go to the moon the following quarter, not get cut by half.

Tesla’s European sales fell by half in absolute numbers too

One objection to this analysis would be this potential mitigating circumstance: “It is OK for market share to fall by more than 50% if the total market is increasing by more than 100%, because what is really important is that absolute sales numbers are growing.” The problem with this is that it also did not happen in Q2.

Tesla’s unit sales in Europe fell by 56% in Q2, compared to Q1. In absolute numbers, European unit sales fell from 59,502 units in Q1 to 26,154 in Q2. In other words, while the European EV market fell by “only” 8%, Tesla’s sales fell by a whopping 56%. That’s why its market share got cut in half.

Tesla’s EV market share falls into oblivion in Europe

With Tesla’s EV market share now below 5% in Europe and falling rapidly, do investors seriously still believe that Tesla is the only company building new EV manufacturing capacity in Europe in 2022 and 2023? Tesla gets outsized press for its sole EV factory opening (on March 22, 2022) but other automakers tend to launch new EV production lines inside new and old factories alike without nearly the same fanfare.

That’s why investors may be surprised to see this data. They may be even more surprised in the coming quarters, despite Tesla’s Berlin factory having launched right before the beginning of last quarter.