Not so long ago, picking an electric car felt like a no-brainer: Tesla models delivered eye-catching designs, top-tier performance, and affordable pricing compared to nearly everyone else. Fast forward to today, and the story’s flipped. A recent UBS study, highlighted by SCMP, paints a sobering picture: Tesla’s allure is fading, and Chinese automakers are sprinting ahead.
Global Decline in Tesla’s Appeal
UBS surveyed over 10,500 EV buyers around the globe and discovered that only 18% still consider Tesla their default choice—down from 22% just a year ago. That drop might sound modest, but it’s happening fast. In the U.S., Tesla’s preference rate plunged from 38% to 29% in the last 12 months. Europe saw an even steeper dive: from 20% to 15% over the same period.
China, once Tesla’s crown jewel market, tells the most dramatic story. Back in 2020—when Shanghai’s factory first churned out Model 3 sedans—Tesla enjoyed about 30% popularity among Chinese EV shoppers. Fast-forward to 2023, and that’s down to 18%. As of 2024, it’s a mere 14%. In a country that helped make Tesla a household name, these figures are nothing short of a wake-up call.
Stiff Competition from Chinese Automakers
So what’s driving this shift? According to Gao Shen, an independent auto analyst in Shanghai, it boils down to local players offering more advanced tech at cheaper prices. “Chinese brands can roll out features that outpace the Model 3 and Model Y—yet still undercut Tesla on cost,” he points out. That blend of innovation and affordability has shattered the notion that Tesla is the unquestioned EV king.
Take the Xpeng Mona M03, a direct challenger to Tesla’s Model 3. It boasts a robust semi-autonomous driving suite and specs that mirror Tesla’s, but at nearly half the price. Then there’s BYD, already China’s top EV seller and gunning to be the world leader by 2025. Xiaomi’s got its foot in the door, too, with the SU7 sedan turning heads and the upcoming YU7 promising even more buzz.
Local Brands, Global Ambitions
Beyond the big names, dozens of local startups—from Zeekr to Nio—are throwing everything they’ve got at Tesla. Many shoppers now see “Made in China” as a badge of pride rather than a red flag. A robust domestic supply chain, state support, and rapid product cycles have fueled this local renaissance.
Meanwhile, Tesla’s rivals aren’t stopping at China. In Europe and North America, firms like Volkswagen, Mercedes, and even startups like Rivian are rolling out competitive models. But for many consumers, it’s not just about specs anymore; it’s about brand perception—something Musk’s public persona has complicated.
What’s Next for Tesla? Affordable Models and an Image Makeover
Elon Musk’s outspoken political views have rattled some customers in Europe and the U.S. Many respondents told UBS they were put off by his vocal support for certain political figures. In Europe alone, analysts believe Musk’s high-profile endorsements during the U.S. presidential campaign chipped away at Tesla’s premium image.
Add a lineup that’s showing its age—Model 3 sales dipped 14% in Q1 2025 with just 23,000 units sold according to JATO—and you’ve got a perfect storm. The refreshed Model Y has faced production hiccups, and many wonder if Tesla’s new “affordable” models, slated for release soon, can stem the tide.
So what should Tesla do? Many experts argue for a two-pronged approach: first, drop prices or introduce genuinely budget-friendly variants to reclaim cost-conscious buyers. Second, Musk and his team might consider dialing back the political theater to focus on their core mission—making the world’s best electric cars.
Whatever happens, one thing’s clear: the EV market has never been more competitive. Chinese automakers have raised the bar, and Tesla will need to up its game if it wants to stay in front. Buckle up—this race is just heating up.
