What's going on?

At least this is one craze that seems to be hanging around: fresh data showed electric vehicles (EVs) represented 15% of Europe�s total car sales last quarter.

What does this mean?

It�s true that there was a slight drop-off in EVs� market share last quarter from the quarter before, but that doesn�t tell the whole story. For one thing, the quarter before saw manufacturers rush to ship EVs that would meet newly introduced stricter emissions rules. And for another, EVs� market share last quarter was still double what it was at the same point the year before. That continued growth might come as a relief to traditional carmakers, which have spent a lot of money on electrifying their fleets � and a lot of energy convincing investors that the extra costs will be worth it in the end.

Why should I care?

The bigger picture: China isn�t invincible.
Europe overtook China as the biggest EV market last year, and that�s a title the region�s expected to defend in 2021. Germany, France, and Italy, after all, boast generous subsidies, while Volkswagen � the region�s biggest carmaker � is slated to release a whole host of new EV models. Speaking of, Volkswagen has its eye on a title of its own: the German giant became the top EV-maker in Europe in 2020, and now it�s aiming to usurp Tesla as the global leader by 2025.

For markets: Tesla has tough days ahead.
Carmakers earn regulatory credits on every EV they sell, but legacy carmakers haven�t traditionally sold enough to stay compliant with emissions rules. Tesla, meanwhile, has more than enough, so it sells them on. And since they don�t cost the company a thing to produce, the admittedly small revenue tends to disproportionately boost the carmaker�s profits. But there�s trouble ahead: the more EVs traditional carmakers sell, the fewer regulatory credits they need from Tesla � which could hit the carmaker�s bottom line (tweet this).