Tesla (TSLA, Financial) is off to a rough start in 2025, with European sales dropping 43% in the first couple of months as more aggressive competition from Chinese and European EV brands heats up. But here's the thing—analysts don't see this as the end of the line. They're betting the drop is temporary, and that Tesla's best-seller, the Model Y, will help it regain traction and market share. Despite a tough quarter, there's real belief that the Model Y, which topped global sales in both 2023 and 2024, can turn the tide by Q2 2025.
Tesla's political ties to Elon Musk haven't helped matters, with some investors spooked by his political involvement and its effect on the brand's image in Europe. As a result, Tesla's stock has plummeted over 30% this year, but there's still plenty of optimism from analysts. They believe the Model Y's updated version will be the turning point—helping to push sales back to previous highs and possibly beyond. The question is, will Musk's politics continue to be a cloud over Tesla's future, or can the company prove its resilience in a more crowded market?
Meanwhile, BYD (BYDDF, Financial) is on a tear, with a massive 94% jump in European registrations in February 2025. While the Chinese EV giant is growing fast, it's still far behind Tesla's scale in the region. Analysts argue that while BYD is a rising star, it's not yet a real competitor to Tesla in Europe. The competition is getting fiercer with more affordable EVs set to hit the market, but if Tesla can lean on the power of the refreshed Model Y, it might just hold its ground against BYD and others.
