Tesla sales tumble 13% as Musk backlash, competition and aging lineup turn off buyers
Tesla sales fell in the first three months of the year in another sign that Elon Musk’s once high-flying electric car company is struggling to attract buyers
NEW YORK (AP) — Tesla sales fell 13% in the first three months of the year, another sign that Elon Musk’s once high-flying car company is struggling to attract buyers.
The leading electric vehicle maker has faced a growing backlash from Musk’s embrace of right-wing politics and his role in the Trump administration. Opponents have staged protests at Tesla showrooms in the U.S. and in Europe, where the sales declines have been steeper.
Tesla’s line-up is aging, and some consumers may have held off from buying its bestselling Model Y while waiting for an updated version. The Austin, Texas, company also faces fierce competition from other EV makers offering vastly improved models, including those of China’s BYD.
Tesla reported deliveries of 336,681 globally in the January to March quarter. The figure was down from sales of 387,000 in the same period a year ago. The decline came despite deep discounts, zero financing and other incentives and could be a warning that the company’s first-quarter earnings report later this month could disappoint investors.
Dan Ives of Wedbush said Wall Street financial analysts knew the first quarter was likely bad, but turned out even worse than expected. He called the sales results a “disaster on every metric.”
“The brand crisis issues are clearly having a negative impact on Tesla...there is no debate,” he said.
Musk has been President Donald Trump’s point man in his effort to cut government spending. As criticism of Musk mounted and Tesla’s sales and stock price slumped, Trump last month held an extraordinary press conference outside the White House in which he praised Tesla, blasted boycotts against the company and bought a Tesla himself while TV cameras rolled.
Tesla investors have complained Musk's work at the Department of Government Efficiency has diverted his focus from running Tesla. On Tuesday, New York City’s comptroller overseeing pension funds holding Tesla stock called for a lawsuit accusing a distracted Musk of “driving Tesla off a financial cliff.”
After falling as much as 6% in early Wednesday, Tesla stock shot up more than 5% on indications that Musk may soon return his attention to Tesla. Politico, citing anonymous sources, reported Trump has told Cabinet members that Musk will step back from his role at DOGE in coming weeks.
Tesla’s stock has plunged by roughly half since hitting a mid-December record as expectations of a lighter regulatory touch and big profits with Donald Trump as president were replaced by fear that the boycott of Musk's cars and other problems could hit the company hard. Analysts are still not sure exactly how much the fall in sales is due to the protests or other factors.
Still, even bullish financial analysts who earlier downplayed the backlash to Musk’s polarizing political stances are saying it is hurting the company, something that Musk also recently acknowledged.
“This is a very expensive job,” Musk said at a Wisconsin rally on Sunday, referring to his DOGE role. “My Tesla stock and the stock of everyone who holds Tesla has gone roughly in half."
Tesla cars have been smashed and set on fire in recent weeks, and protests have been staged at hundreds of Tesla dealerships. Owners have put bumper stickers on their cars saying, “I bought this before Elon went crazy.”
Europeans have also balked at buying Tesla, especially Germans upset after Musk publicly supported a far-right party in national elections and gave what many say was a Nazi-like salute at a Trump inauguration rally in January.
Tesla is expected to report earnings of 48 cents per share for the first quarter later this month, up 7% from a year earlier, according to a survey of financial analysts by research firm FactSet.
Nearly all of Tesla’s sales in the quarter came from the smaller and less-expensive Models 3 and Y, with the company selling less than 13,000 more expensive models, which include X and S as well as the Cybertruck.
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AP Business Writer Michelle Chapman contributed to this report from New York.
