In Scramble to Meet Insane NetZero Goals, the EUs Nemesis Scores Again

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This has to be burning some European Union brahmin butt.

As badly as the powers that be, from bureaucrats in Brussels to the heads of countries like Germany and the United Kingdom, would love to knock that cocky Elon Musk on his tuchus once and for all…it won’t be this week.

Admittedly, it hasn’t been a rosy year for Tesla in Europe. A fair amount of analysts are blaming not only competition, waning government subsidies, and economic conditions for the steep decline in sales of their EVs but also an aversion to Musk and his activist stance. Some European consumers, they say, are choosing to purchase other brands of EVs due to personal dislike of Tesla’s owner.

Sales figures have been rather dreary, particularly compared to the European EV sector as a whole.

Tesla Sales Are Tanking In Europe

Eleven months into 2024, Tesla is seeing a double-digit decrease in registrations.

Europe is experiencing some weird times. From politics to economy and car sales, it’s far from rosy, and arguably the biggest player in the electric vehicle game is having a rough year.

Eleven months into 2024, Tesla recorded a double-digit decrease in registrations, according to the European Automobile Manufacturers’ Association (ACEA), which released official figures for November.

To be clear, Tesla is still one of the largest EV manufacturers in Europe and the United States, but its grip is weakening on the other side of the Atlantic. Last month, Tesla recorded a 40.9% decrease in registrations in the European Union compared to the same month last year. The number of registrations went from 31,810 in November 2023 to 18,786 last month, marking a decrease in market share from 3.6% to 2.2%.

Year-to-date, Tesla had 211,405 registrations in the EU, 15.2% fewer than last year’s 249,265 units.

…The automaker’s losses can be attributed to a number of factors, including the increasingly controversial attitude of its CEO, Elon Musk, and the decrease in government incentives…

What this article left out about the Tesla figures that might also have had an impact were factory disruptions like an arson attack against the power grid supplying Tesla’s Gigafactory outside Berlin in March that was severe enough to shut the plant down.

The public prosecutor’s office in the eastern German city of Frankfurt an der Oder has opened a probe into a recent attack on the power grid supplying energy to Tesla’s Gigafactory in the Berlin-Brandenburg area by environmental activists camped out near the site.

Office spokesperson Carola Ochs told German news outlet DPA on Thursday that investigations were moving forward after the incident in “all directions” and that it involved the criminal offense of sabotage of infrastructure causing harm to the community.

An electricity pylon in Brandenburg exhibited scorch marks after the attack, with the probe also based on the charges of disturbing public works and arson.

The ensuing power outage temporarily cut electricity for thousands of households in several districts of Berlin.

It’s likely to halt Tesla’s operations until the end of next week, much longer than originally thought, the company said in a statement late on Wednesday.

And then a charging ragtag army of climate cultists attacked the same facility in May.

So-called “activists” storm the Tesla factory premises. As an international company, I would no longer invest in Germany. @elonmusk, do you now see the plant near Berlin as a mistake? It’s not the first incident. pic.twitter.com/TdRNJLV7xO

— severin tatarczyk (en) (@stagerbnen) May 10, 2024

There’s also been a raging Tesla vs Swedish labor union and sympathetic Swedish postal union battle going on since October of 2023 that was in court this past fall yet again.

Swedish trade union IF Metall has filed a lawsuit against Tesla (TSLA.O), opens new tab alleging the company failed to inform employee representatives of workplace changes, which is mandatory under the country’s labour laws, union officials said on Thursday.

It was IF Metall’s second lawsuit this year alleging that the U.S. electric vehicle maker was in breach of Sweden’s Co-Determination Act that stipulates companies must inform labour unions of major changes.

The first case has yet to be decided by the courts.

Tesla and Musk have has their share of headaches on top of the general economic situation. It surely presents challenges when coupled with an owner who is a lightning-rod personality.

Overall, though, EV sector registrations in the EU were down about 5.4% in 2024 year-to-date, and November’s monthly figures showed those lagging 9.5% behind and, as I’ve posted about before, the EU could care less. They have their set unicorn fart NetZero goals to meet, regardless of what the reality in the sales or boardroom is.

This is where Tesla shines – it is a one-trick EV pony. Tesla doesn’t manufacture any internal combustion engine (ICE) vehicles, nor is there a single hybrid in their line-up. All the other traditional auto manufacturers who sell on the continent do, and they are scrambling to meet the new pollution minimums set by the EU that are due to go into effect.

If they don’t, it will cost them. Automakers will be on the hook for 95€ per gram of CO2 over the limit multiplied by every vehicle sold.

Best estimates right now are that the math works out to close to 15B€ in fines for car manufacturers.

WHAT TO DO, WHAT TO DO

EU manufacturers are busy slicing and dicing trying to unload inventory to avoid being slammed.

Renault’s Dacia brand has cut the price of its low-cost Spring electric vehicle by €2,000 in France, part of a wave of expected discounts in Europe this year to boost stagnant EV sales as new CO2 emissions targets take effect.

Automakers in Europe are expected to rely on discounts to push more EV sales to help them meet tougher new emissions rules in the European Union. Government incentives have been rolled back in major markets including Germany and France, increasing the list price by thousands of euros on EVs.

Experts and automakers say that at least 20 percent of all European sales by most car companies must be EVs to avoid heavy fines, but only 13 percent of vehicles sold in the region during the first 11 months of 2024 were electric, according to the lobbying group ACEA.

The reality on the ground is again brutally at odds with Brussels’ Green dreams.

But there is a way to circumvent the pain. EU rules allow manufacturers to “pool” the CO2 overages with others who might have room to lower the overall average and save everyone money.

Tesla, the purely electric car company, has the deepest pool in the neighborhood, and almost all the other kids are jumping in. Of course, there’s an entry fee.

Tesla could collect more than €1 billion ($1 billion) in compensation from rival automakers that need help meeting tougher pollution standards in the European Union this year, UBS Group analysts said.

Tesla will pool the fleet of electric vehicles it sells this year with at least five other manufacturers, including Stellantis, Toyota, Ford, Mazda and Subaru, according to EU documents released Jan. 6. The arrangement allows automakers to average out the emissions of their fleets, with those selling fewer EVs compensating companies such as Tesla that are below the EU limit for CO2 emissions.

…“Tesla’s compensation could even exceed €1 billion if it monetizes its entire long CO2 position,” UBS analysts led by Patrick Hummel wrote in a report published Jan. 8. Volvo, which has benefited from the success of the EX30 electric small SUV, could be in line for as much as €300 million in compensation this year, Hummel estimated in August.

Automakers in the region have lobbied for the EU to ease the CO2 standards ratcheting up this year, warning that they will be forced to either pay penalties, reduce production, pool with foreign competitors or sell EVs at steep losses. EV sales have stagnated in Europe after governments in markets including Germany phased out subsidies.