If you follow our monthly electric vehicle sales reports (we publish a bunch), you probably know that the Tesla Model 3 is the best selling electric vehicle in Europe — by far. However, reading the European EV sales market is a bit like trying to read your future with tea leaves. The issue is: registrations are not actually sales. Some people buy an electric vehicle model but have to wait a long time for it to be delivered. Of course, knowing that’s the case for a model will also kill sales, because most people are not cool waiting a year for a car.
Needless to say, Tesla isn’t the only brand that has had problems with supply not matching demand. In fact, if you simply look at how much electric vehicle sales jumped in Europe in 2020 and 2021 once automakers were forced to start delivering them in higher volumes, you can get a sense for how much sales and registrations were being held back by lack of adequate supply (and a lack of serious sales effort).
As EV registrations and market share have skyrocketed in Europe (hitting 19% last month!), we have seen Tesla’s “share” of the EV market drop. Again, the core reason for that has been that other automakers are actually trying now. (Thanks, EU!) Some people intent on trying to sully Tesla’s image and future have been obsessed with the theory that this is the beginning of the end for Tesla — that, as the EV market grows up, Tesla’s share of it drops, until the company actually starts shrinking and dies. This is not a new theory — it has been running for years — but it has come to life again recently due to these market changes in Europe.
Long story short, the quote from Tesla that is in the headline caught my attention while reading through Tesla’s 2nd quarter shareholder letter (ironically, on a flight from Europe to the United States) because it quite strongly refutes the anti-Tesla talking points referenced above. “European demand remains well above supply” tells us that consumer demand is still strong in Europe — very strong — and Tesla’s global production limitations have resulted in far fewer “sales” (i.e., registrations) in Europe than consumers there would like. Elsewhere in the report, Tesla writes: “Given strong U.S. demand, the majority of all Model 3/Y production was delivered in North America.” Europe has been getting Tesla vehicles produced in China as the Shanghai gigafactory’s production capacity has ramped up, but that’s apparently still not enough.
What is Tesla’s actual level of quarterly demand in Europe at the moment? Who knows? What will it be once Tesla ramps up production further, once the company has Giga Berlin online with “German made” Tesla cars for sale, once more people get to know about Tesla and its vehicles? Who knows?