Tesla Motors Inc Troubles In Europe

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Electric vehicle maker Tesla has taken the United States by storm over the last five years or so, with Teslovers in California and across the rest of the country snapping up its EVs just about as fast as the company can make them. The Tesla Model S luxury sedan has also developed a cult following across the globe, with buyers in countries ranging from Qatar to China.

That said, Tesla has not been a great success in Europe. A September 16th report from Bloomberg Business explores this issue, and suggests there are several reasons Tesla is not enjoying much success in Europe.

Bloomberg’s Mathieu Rosemain notes that Elon Musk and the U.S. EV maker have their work cut out for them on the continent.

Details on Tesla’s European woes

A mere 958 of Tesla’s high-end Model S sold in Germany in the first eight months, based on data from motor vehicle agency KBA. On the other hand, there were 5,149 deliveries for the even more expensive Mercedes-Benz S-Class sedan. Of note, BMW’s newer i3 all-electric city car also beat the Model S in sales by over 30% so far this year.

The strength of the competition Tesla is facing can be seen at this week’s International Motor Show in Frankfurt. Audi was showing off its zero-emission E-tron Quattro concept SUV; Porsche showed designs and claimed they would be offering an electric sports car within five years, and BMW promised more of its electric “i” models are on the way.

Rosemain highlights that Tesla’s booth at the IMS was pretty slow compared to the pumping music and chattering crowds at the German carmakers. Only a few visitors circulated among the three Model S sedans decked out in red, white and blue. The soon-to-be-launched Model X SUV was nowhere to be seen at the show.

“For us to achieve our long-term goal, which is to get people driving electric vehicles, we need the cooperation of traditional carmakers,” Ricardo Reyes, Tesla’s spokesman, explained. “When you hear companies like Porsche or BMW make very public commitments to this, it’s a vindication of what we’re trying to do.”

Auto industry analysts say that expanding sales in Europe will be a real challenge for Tesla, as German consumers are notoriously slow in adopting new products and typically place more trust in domestic brands. Keep in mind that Tesla also hasn’t filled the vacant position of European sales chief. Moreover, the firm does not currently to expand its network of Supercharger stations in Germany.

According to data from market researcher IHS Automotive, Tesla delivered about 7,100 vehicles in Europe and 11,700 in the U.S. in the first six months of 2015.

Statement from European auto market analyst

Although it has seen notable successes in both the Netherlands and Norway, Tesla and Musk have to deal with all three German brands to become a major player in the European EV market.

“It’s not enough to be successful in Norway; you have to be successful in the big markets,” commented Stefan Bratzel, director of the Center of Automotive Management at the University of Applied Sciences in Bergisch Gladbach, Germany. “If you make it in Germany, you can make it everywhere.”

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