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Tesla has big ambitions for Germany. It better.

 

Growth in Germany is necessary for continued growth of the overall company. Tesla (ticker: TSLA), after all, isn't all that big in Germany yet, despite recently opening a brand new assembly plant. How Tesla's market share in Europe's largest economy develops will be a good test for the electric vehicle leader, and its stock.

 

Automotive news outlet Automobilwoche (Automobile Week in English) reported Sunday that Tesla plans to double sales in Germany in 2022. That would put it a position to overtake the likes of Toyota Motor (TM) in Germany.

 

Tesla didn't respond to a request for comment about sales goals for Germany.

 

Hitting the goal for 2022 represents some a big final four months of the year and an acceleration of sales from the first eight months. It would be a sign that Tesla's new plant in Germany is having some success ramping up production. Most Tesla cars sold in Europe are imported from the company's Shanghai plant.

 

Tesla has sold almost 25,000 vehicles in Germany through August. That's an increase of about 37% year over year, but only good enough to give Tesla a market share of about 1.5%. (Tesla's August market share for battery-electric vehicles was about 16.5% in Germany).

 

Tesla's market share of all U.S. passenger vehicle sales is at about 6% in 2022. (Tesla still accounts for roughly two-thirds of all battery-electric sales in America).

 

So Tesla has some work to do to increase share in Germany. Hitting 80,000 vehicle sales in 2022 would mean another roughly 55,000 units in the final four months of the year, and a roughly 150% jump frrom unit sales in the final four months of 2021.

 

Higher production out of Tesla's German plant, opened in 2022, should help. Local production might enable Tesla to lower domestic German prices, further boosting Tesla demand.

 

Tesla is a premium brand in Germany. A Model Y can easily cost EUR70,000. The average price of a new car in Germany is about EUR38,000, according to Statista. That is a little less expensive than the $48,000 average in the U.S.

 

Tesla didn't respond to a request for comment about German prices.

 

There isn't much difference between the purchase of a Model Y in the U.S. and a Model Y in Germany, although there are different EV purchase incentives that impact price in both countries.

 

Hitting 80,000 units, regardless of how Tesla does it either with higher available or lower pricing or both, would show that Tesla can grow market share in a mature, crowded auto market. Failing to reach its goals, however, would give Tesla investors something to think about.