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The company is also discontinuing lower-margin models, such as the base Model 3 rear-wheel-drive in the U.S.—which couldn't qualify for tax incentives—and replacing the Model Y rear-wheel-drive in the UK with the Long Range variant. These moves optimize profit margins while aligning with geopolitical shifts, especially the increased tariffs on Chinese batteries and vehicles.
Market Penetration and Regulatory Environment
Tesla’s influence in global markets is expanding. In Norway, electric vehicles now account for over 96% of new car registrations—an inevitable trend as electric cars become cheaper, cleaner, and preferred by governments for their environmental benefits. Similarly, Tesla's market share is growing across Europe, with notable gains in Sweden and Norway.