Matthias Schmidt raised a pertinent question with a graphic he created for the European electric car market. When all other companies offering EVs saw sales increase, Tesla sold fewer vehicles than it used to. We had some questions for him and managed to talk to Schmidt Automotive Research’s founder. Our talk raised even more concerns for Giga Berlin.
If you remember, Tesla was already having a hard time recruiting people for the factory. The sales performance last year is something else Giga Berlin now has to address. But will it have the proper tools to get there?
Our main doubt was why Schmidt decided to have only the 18 countries that formed the European Union before 2004. This is his explanation:
“The report focuses on these 18 markets as this accounts for over 90 percent of the EU plus EFTA plus UK passenger car market.”
For our other question, Schmidt did not give us his guess on why Tesla did not go as well as it should. He only shared his concerns about Tesla’s performance in a market that is currently almost as big as that of China for EVs.
“I would have expected Tesla European volumes to have risen in 2020 and not fallen, principally due to Fremont no longer supplying China with Model 3 units. The European quota should have been larger than 2019.”
Germany’s EV market is currently larger than California’s, as Schmidt Automotive Research revealed in a recent post.
“With huge increased subsidies on the table in Germany, Tesla should have performed far better in an EV market that ended the year far higher than Tesla’s own domestic Californian market.”
Tesla ended 2020 with 96,000 units sold in Europe, among which are all three vehicles it sells there: Model S, Model X, and Model 3. Supposing the Model Y could sell as well as all those three vehicles combined, that would give Giga Berlin a volume of 100,000 units in the best-case scenario.
For a factory that plans to produce 500,000 units a year, the Model Y may not be the adequate choice to get started. It could also make the Model 3 there to have a larger local production, but only the original car Tesla promised for the European market may make Giga Berlin reach the production volumes it aims to have.
Elon Musk already said that Tesla probably needs a hatchback or a smaller SUV than the Model Y for the European market. With the performance numbers it presented there in 2020 – despite all the subsidies and in a much larger market than the US for electric cars – it will probably need it from the very beginning.