European leasing companies are facing substantial financial losses due to issues with Tesla vehicles
In the dynamic world of electric vehicles (EVs), Tesla, once a pioneer and leader, is currently facing challenges in Europe. The company's residual values have been under pressure, causing ripples in the market.
The first quarter of 2025 saw a significant drop in Tesla registrations across Europe, with a 45% decrease compared to the same period the previous year. This decline has been felt particularly by smaller Tesla-only lessors in Norway and Sweden, who have been forced to renegotiate leases or absorb losses.
Europe's largest leasing company, Ayvens, acknowledges Tesla's falling residual values (RVs) as a significant issue but notes that Tesla is offering solutions. The company is providing discounts on new vehicle purchases, aiming to stimulate demand.
The core models of Tesla, the Model 3 and Model 7, are now seven and five years old, respectively. Across key markets, Tesla is offering unofficial discounts of up to €2,000 and other financial incentives such as car loan discounts.
However, not all Tesla leasing companies are faring well. MisterGreen, a Dutch company primarily offering Teslas, has stopped leasing out new Teslas and is limiting itself to re-leasing used ones via a program called ReDrive. The company, founded in 2019 and a pioneer in the electrification of mobility in the Netherlands, is currently facing bankruptcy.
The reversal of Tesla's image is due to its association with CEO Elon Musk's divisive political positions, particularly in Europe. Despite this, Musk has retreated from public view, no longer inviting controversy for his political activities.
Tesla's market position has significantly diminished in the past six years. In 2024, China's BYD overtook Tesla as the world's largest EV seller. The company, learning from Tesla's mistakes, has prioritised RV stability, a move that seems to be paying off.
Despite Tesla's current struggles, it is noticeable that Tesla itself will likely be able to weather the current 'perfect storm' thanks to Elon Musk's deep pockets. However, whether other players who have committed themselves to Musk's automotive brand, like MisterGreen, will be as fortunate in handling the future remains to be seen.
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