The world-famous car manufacturer Tesla is synonymous with electric vehicles. Not only has Tesla been developing cutting-edge vehicles for over 16 years, but it’s also spearheaded the EV infrastructure development in the UK. It’s therefore fair to say the EV market we know and love simply wouldn’t be the same without Tesla.
However, it does seem that there’s trouble in paradise. The recall of their underperforming Cybertruck, laying off more than 10% of its workforce in 2024, and a stock price that goes up and down more than a seesaw.
So what’s really happening? Is this merely a bump in the road, or are we witnessing the reshaping of Tesla?
Just how significant has Tesla been in the EV industry?
Tesla and Elon Musk have been instrumental in shaping the market for EVs as we know it. Their very first vehicle brought to market, the Tesla Roadster, was the first motorway-legal, serial production, all-electric car to use lithium-ion battery cells, and the first production all-electric car to travel more than 244 miles per charge. This was the first time an electric competitor was able to rival equivalent offerings such as the BMW Z3 or the Mercedes SL series.
Product innovation didn’t stop there, and Tesla now boasts world-leading self-driving technology. This allows drivers to fully take their hands away from the steering wheel, with the car capable of manoeuvring, indicating and detecting hazards just like a human driver would. While the system isn’t perfect just yet, you can’t deny that what Tesla has created is extremely innovative and will potentially change driving as we know it. Tesla was also the first to introduce maps with integrated charging, they have a bump at every charge point so you know exactly where to stop. Their car isn’t just a car, but an entertainment system for children. When you own and drive a Tesla, you’re driving a vehicle that has so much more than has been offered in the past. It truly is a luxury, competing with the giants of the automotive industry.
Step away from the cars themselves and Tesla has still been hard at work developing charging infrastructure across the UK. There are now more than 1400 superchargers installed in over 140 locations across the country, with many of them also accessible for non-Tesla drivers, meaning many motorists can benefit from Tesla technology.
What problems are Tesla currently facing?
It’s also been revealed that Tesla’s global car sales dropped 1.1% in 2024 for a total of 1.79 million units. Share prices have also experienced some turbulence. This is most likely due to a mixture of elements, including a potential drop in demand for EVs, a shift in customer preferences to other EV manufacturers or Elon Musk wrapping himself in controversy every week.
Tesla’s aggressive pricing on new vehicles has significantly impacted the used car market, creating a major challenge for EV residual values. While much has been made of Porsche Taycan values declining, Tesla’s pricing strategy has had a more profound effect on depreciation trends.
Previously, Tesla vehicles were known for retaining their value well, particularly during the peak of EV demand in 2020. However, recent data suggests that Tesla’s residual values are not what they once were. The Tesla Model X is one of the priciest entries in the company’s catalogue and after three years is thought to lose only 43% of its value. While this is better than the average overall, it still marks a decline from the brand’s historically strong performance. This shift underscores the volatility in EV resale markets, influenced not just by competition but also by automaker pricing policies.
Tesla once positioned itself as the premium manufacturer to beat, and already had a well-established market reputation long before governments started to introduce ZEV mandate deadlines and tax incentives to switch to EVs. Now traditional manufacturers such as BMW, Mercedes, Porsche and Audi have all introduced several fully electric vehicle lines, as well as newcomers such as BYD, it could be that Tesla simply doesn’t have the same appeal it once did in the eyes of many consumers.
What’s next for Tesla?
Despite the hurdles Tesla has faced recently, you’d be wrong if you were thinking it’s all doom and gloom. Reports also say Tesla has a strong chance to outperform the market over the coming months, partly due to its increased sales in Q4 2024 compared to 2023.
As Tesla begins powering down production of its polarising Cybertruck, it has also vowed to accelerate the launch of more affordable models, potentially marking a change in the long-term Tesla narrative that its electric vehicles aren’t financially accessible for most. Maybe not the best time to make this vow, as they announce the refreshed Model Y has a starting price of almost £61,000. A huge jump from the previous model.
Elon Musk also doesn’t plan to let Tesla fall by the wayside on its digital technology too, as they continue to work on integrating ride-hailing technology into their app to take on the likes of Uber. Most recently, Tesla announced their self-driving tech allows their vehicles to drive to their designated spots for shipping without having anyone in them.
Tesla isn’t just an electric car company: it also has a power storage business that may even potentially overtake its electric vehicle business in the future.
Tesla has been leading the charge for EVs for some time now, and despite the arrival of competitive car companies, price cuts and fluctuating stock prices, there’s no doubt that it will still be here for the foreseeable future, even if its market position changes within the electric vehicle industry. As of January 2025, Tesla has a market cap of £1.018 Trillion, which is over double the cap in January 2024. Even if Tesla did experience a drop in sales, it remains an incredibly valuable car company and has already positioned itself very well as a key market player for all things EV. It’s this holistic approach to being an electric vehicle company that sets Tesla apart from the rest.
Whether you want to get behind the wheel of your first Tesla or want to try another brand of EV, we have electric vehicles from all the best brands here at P+B. If you need help choosing your first EV and want to make the move away from the traditional car industry in favour of greener vehicles, get in touch with us.
