As traditional giants pile into the electric car market, Tesla may need to reposition itself.

    Tesla delivered 11,014 Model 3s in July, according to the most recent data from the Alliance, maintaining its no. 1 spot in pure electricity. According to the China Association of Automobile Manufacturers, Tesla's sales in China will reach 100,000 in 2020.

    In The Chinese market, Tesla has found a sweet spot. But in Europe, its popularity is starting to wane.

    Tesla is losing its lead in Europe's fast-growing electric car market as governments build more vehicles to stimulate demand and reduce carbon dioxide emissions.

    European battery-powered car sales rose 34% in the first half to 217,495 units, according to JATO Dynamics, a market-research firm. Tesla's European sales, however, fell 18% to 37,251 vehicles. The Renault Zoe has overtaken the Tesla Model 3 to become Europe's best-selling electric car.

    The decline comes as more consumers are turning to electric cars in Germany and France, Europe's two largest passenger car markets. The corresponding stimulus measures by the two governments have been considered the world's most heavily subsidised.

      According to Germany's KBA motor vehicle authority, Tesla registrations fell 67 percent in July from a year earlier to 203 vehicles. Overall German electric vehicle sales grew 182% year on year, accounting for 5.3% of the German market. Tesla's registrations in Germany fell 22% to 5,306 vehicles in the first half of this year, while the Model 3, which starts at 39,990 euros, is eligible for a 9,000 euro subsidy in Germany.

   In July, 119 Tesla Model 3 cars were registered in France, compared with 620 cars in June, according to the French auto industry association CCFA. In the first seven months of this year, only 3,681 models were sold, making it the 62nd best-selling passenger car in France.

   The Model 3 will start at €49,600 in France, where it will be eligible for a government-backed trade-in scheme. But because the car costs more than 45,000 euros, it is not eligible for the ev subsidy.

   In addition to Germany and France, Tesla also saw sales decline in environmentally conscious Northern Europe. Tesla does not release official sales figures, but according to Bestsellingcarsblog.com, a car-sales aggregator, sales in Norway and Sweden fell by 93% and 98%, respectively.

     According to a new report from industry analyst Matthias Schmidt, Tesla's sales in Europe were impressive in 2019, but worrying in 2020.

    The reason, according to Automotive News Europe, is that Tesla is prioritizing U.S. sales and is still struggling to balance supply and demand in Europe. Tesla is building a gigafactory near Berlin that will help ease supply and demand in Europe.

    But others argue that it is too early to say for sure, and that the full cause of Tesla's decline in Europe -- a lack of demand or supply -- will only be known when sales are released in the second half of the year. Though Musk has repeatedly stressed that consumer demand is not an issue. But as traditional giants pile into the electric car market, Tesla may need to reposition itself. So far, Tesla has focused more on proving to the industry that there is demand for electric cars, but its future competitiveness is questionable.