How Tesla Lost Its Grip While Musk Pursues Automation and Record Pay

Elon Musk’s strategic priorities have shifted dramatically away from Tesla’s traditional strength—vehicle production and sales. With his attention divided between advancing the company’s robotics ventures and cementing a historic $1 trillion remuneration package, Tesla’s core automotive business has begun showing cracks across all major markets simultaneously.

The deterioration is most severe in Europe, where October deliveries cratered 48.5% compared to last year. Full-year European sales have contracted approximately 30%, starkly contrasting with industry-wide EV growth of 26%. This represents a stunning reversal for a manufacturer whose Model Y once dominated global rankings. The underlying causes trace back to late 2023, when Musk’s controversial political statements triggered regional backlash that Tesla has never fully recovered from—despite his recent moderation in public statements.

Competition Reshapes the European Battlefield

The real problem extends beyond brand sentiment. European automakers have decisively entered the mass-market EV race. Volkswagen’s electric portfolio surged 78.2% through September, delivering 522,600 units—more than triple Tesla’s volume. Meanwhile, Chinese competitor BYD deployed 17,470 units across European markets in October alone, doubling Tesla’s monthly total.

The competitive landscape has transformed fundamentally. Over 150 electric models now operate in the U.K. marketplace, with approximately 50 new EV launches anticipated next year—none bearing Tesla badging. More than a dozen competitors offer fully electric vehicles below the $30,000 threshold. Chinese automakers flood the channel with diversified portfolios spanning EVs, hybrids, and combustion-engine vehicles. Tesla counters with only two mass-market configurations, having recently introduced a budget Model Y variant stripped of premium features.

Ferdinand Dudenhoeffer, automotive research specialist, articulated the central challenge: “Europeans have finally caught up. Musk faces not merely Chinese competitors or his own aging lineup, but established legacy manufacturers executing competent EV strategies.”

Asia-Pacific Markets Tighten Further

China’s Tesla operations show weaker but still concerning momentum. October deliveries plunged 35.8% to three-year lows, with year-to-date sales declining 8.4%. New entrants like Xiaomi, whose YU7 model has rapidly positioned itself as a Model Y alternative, alongside established domestic brands like Chery, continue fragmenting market share.

American dynamics appear marginally more favorable. September deliveries spiked 18% as consumers rushed to capture expiring federal tax incentives, though October retreated 24%. Industry projections anticipate continued cooling. Recently introduced lower-priced Model Y and Model 3 configurations—approximately $5,000 reduced pricing—offer modest defensive potential. However, industry veterans increasingly argue that Tesla requires an entirely new mass-market platform to meaningfully revive momentum. Such development appears absent from current roadmaps as Musk reallocates resources toward autonomous robotaxi technology and humanoid robotics initiatives.

Notably, Musk’s remuneration package structure demonstrates curious independence from sales performance. His multi-billion compensation framework targets 1.2 million average annual vehicle deliveries across the coming decade—roughly half a million units below 2024 actual volumes—suggesting financial motivations increasingly diverge from core business results.

Globally, Tesla vehicle deliveries face projected annual contraction of 7%, compounding 2024’s 1% decline despite record Q3 volumes powered by tax credit expiration dynamics.