[AUSTIN] Tesla’s vehicle sales fell 13 per cent last quarter to an almost three-year low, as the carmaker made over its most important model and dealt with international backlash against Elon Musk.
The company said on Wednesday (Apr 2) that it delivered 336,681 vehicles in the first three months of the year, its worst showing since the second quarter of 2022. Analysts on average were expecting the company to sell more than 390,000 cars and trucks, according to estimates compiled by Bloomberg.
The figures speak to the extent of the disruptions to Tesla’s business early this year. The company retooled factories around the globe to make the redesigned Model Y, leading to lost output that’s common when carmakers transition from one vehicle generation to the next. The extraordinary factor was Musk’s involvement in global politics that sparked protests across the US and Europe.
Demonstrations have picked up in recent weeks in response to Musk asserting himself in Washington and beyond in support of far-right candidates and causes. The Tesla chief executive officer led President Donald Trump’s effort to shrink the federal workforce, weighed in on Germany’s federal election and called for the US to exit the transnational military alliance Nato.
Tesla shares dropped as much as 6.4 per cent shortly after the start of regular trading on Wednesday. Since hitting a record high in the weeks after Trump’s election victory, the stock had plunged 44 per cent as of the close Tuesday.
Forecasting growth
The deliveries underscore the challenge Tesla faces in reviving the flagging auto business that accounted for more than three-quarters of revenue last year. The company has said it expects to return to growth after deliveries dropped in 2024 – its first annual decline in more than a decade.
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Investors were braced for a rough start to the year, both because of the Model Y transition and the first quarter tending to be the slowest for auto sales. But Tesla fared worse than many of its competitors.
In Europe, registrations plunged 43 per cent in the first two months of the year, deviating from the 31 per cent rise in industrywide EV sales. Wholesale shipments also tumbled in China, where domestic giant BYD pulled further ahead. BYD posted a 58 per cent increase in first-quarter deliveries of its battery-electric and plug-in hybrid vehicles.
Tesla delivered 323,800 Model Y and Model 3 vehicles in the first quarter, down 12 per cent from a year ago. Sales of all other vehicles – which include the Cybertruck, Model S and X – fell 24 per cent to just 12,881 units.
Although the company has yet to break out Cybertruck sales specifically, a recent recall showed Tesla sold just over 46,000 pickups in the first 15 months it was on the US market.
Tesla takedown
A protest movement against Musk known as Tesla Takedown is holding hundreds of demonstrations at Tesla locations around the world early this year. The group has urged people to sell their Tesla vehicles and the company’s shares.
Criticism has also come from Tesla’s own investor base. On Tuesday, New York City Comptroller Brad Lander, who serves as investment adviser to the city’s pension funds, criticised Musk’s government work and accused Tesla of misrepresenting the CEO’s level of involvement with the company. He said shareholders have suffered because they “don’t have a full-time CEO paying attention to the company and their interests.”
Musk has acknowledged having “great difficulty” running his businesses alongside the work he’s doing in Washington. But during a Mar 20 meeting of Tesla employees broadcast on X, he painted a bright future for the company and told staff to hold on to their stock.
Executives increasingly are staking Tesla’s future on artificial intelligence, autonomy and robotics, with plans to launch of a robotaxi service in Austin in June. The company also has said it will launch new, more affordable vehicles in the first half of the year, though it’s given few details.
Both initiatives have given some investors hope Tesla could spruce up its ageing lineup and overcome its CEO’s waning popularity in the coming months. BLOOMBERG
