Tesla is facing tough time in Europe. Ever since Elon Musk decided to join Donald Trump's government, his political decisions have hurt the Electronic VEhicle (EV) maker almost across Europe. Elon Musk's souring ties with President Trump's administration too has not helped. The only bright spot in Europe for Tesla has been Turkey. In Europe, Turkey has been one of Tesla's fastest-growing markets. However, Tesla's efforts to mitigate slumping European sales with gains in Turkey may be at risk after a surprise tax hike in the country.
Turkey has raised the lowest tier of its special consumption tax for electric vehicles — which includes Tesla’s top-selling Model Y — to 25% from 10%, according to a presidential decree published in the country’s Official Gazette.
Tesla sales jump 171% in Turkey
Turkey has emerged as an increasingly significant market for Tesla, helping alleviate falling demand elsewhere in Europe. In fact, CEO Elon Musk name-checked the country during the company’s quarterly earnings call recently.
Tesla sales in the country soared 171% in June to 7,235 units, with the Model Y taking the top spot among EVs. In same month, Tesla registrations across Europe dropped 23% to 34,781 vehicles, according to data published Thursday by the European Automobile Manufacturers’ Association.
What helped Tesla grow in Turkey
Tesla's success in Turkey, driven by a locally tailored Model Y qualifying for a 10% tax rate, faces challenges as a new levy could raise prices by about $6,000, potentially dampening demand. Previously priced at 1.87 million liras ($46,100), the Model Y may lose its edge, while many combustion-engine competitors’ tax brackets remain unchanged. This tax hike compounds issues for Tesla CEO Elon Musk, who has flagged tough quarters ahead due to fading US EV subsidies and delays in autonomous vehicle progress.
The policy shift also threatens competitors like BYD Co., which plans local production in Turkey and offers models like the Dolphin, Atto 3, and Seal in the same low-tax bracket. Other manufacturers, including Volkswagen AG, Hyundai Motor Co., and Stellantis NV, with affordable EVs in Turkey, may also feel the impact.
Turkey has raised the lowest tier of its special consumption tax for electric vehicles — which includes Tesla’s top-selling Model Y — to 25% from 10%, according to a presidential decree published in the country’s Official Gazette.
Tesla sales jump 171% in Turkey
Turkey has emerged as an increasingly significant market for Tesla, helping alleviate falling demand elsewhere in Europe. In fact, CEO Elon Musk name-checked the country during the company’s quarterly earnings call recently.
Tesla sales in the country soared 171% in June to 7,235 units, with the Model Y taking the top spot among EVs. In same month, Tesla registrations across Europe dropped 23% to 34,781 vehicles, according to data published Thursday by the European Automobile Manufacturers’ Association.
What helped Tesla grow in Turkey
Tesla's success in Turkey, driven by a locally tailored Model Y qualifying for a 10% tax rate, faces challenges as a new levy could raise prices by about $6,000, potentially dampening demand. Previously priced at 1.87 million liras ($46,100), the Model Y may lose its edge, while many combustion-engine competitors’ tax brackets remain unchanged. This tax hike compounds issues for Tesla CEO Elon Musk, who has flagged tough quarters ahead due to fading US EV subsidies and delays in autonomous vehicle progress.
The policy shift also threatens competitors like BYD Co., which plans local production in Turkey and offers models like the Dolphin, Atto 3, and Seal in the same low-tax bracket. Other manufacturers, including Volkswagen AG, Hyundai Motor Co., and Stellantis NV, with affordable EVs in Turkey, may also feel the impact.
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