Tesla Faces Sales Challenges While Preparing Cheaper Model Y for Global Markets

Tesla's sales slump in key regions, but the company is ramping up production of a smaller, more affordable Model Y to regain market share.

Tesla's European sales have declined sharply in early 2025, with a 45% drop in January and a 41% decrease in February across top markets.
In China, Tesla's market share has eroded due to intense competition, but production of the refreshed Model Y is increasing, with March sales beginning to rebound.
The company is developing a lower-cost Model Y, codenamed 'E41,' expected to be 20% cheaper to produce and aimed at bolstering sales in China and other markets.
Wells Fargo analysts have downgraded Tesla's stock price target, citing weak fundamentals, political backlash tied to Elon Musk, and significant sales declines in key regions.
Tesla's Gigafactories are ramping up production of the refreshed Model Y, with European registrations showing signs of recovery in March after a slow start to the year.