Tesla experience its worst sales decline ever last quarter, with a 13% drop in deliveries compared to last year.
Tesla sales plunged 13% in the first three months of this year, the largest drop in deliveries in its history, as backlash against CEO Elon Musk and growing competition took a large bite out of demand for its EVs.
Tesla reported Wednesday that it delivered 336,681 cars in the quarter, 50,000 fewer vehicles compared to the first three months of last year. The results were the company’s worst sales in nearly three years.
Tesla pointed out that its factories were closed for several weeks as it switched over to production of the new Model Y but there isn’t much doubt that what we’re seeing here is a left-wing backlash.
“The Street and us knew a bad 1Q was coming but this was even worse than expected,” said Dan Ives of Wedbush Securities, who has been a bull on Tesla, in a note to clients Wednesday. “This quarter was an example of the damage Musk is causing Tesla. This continues to be a moment of truth for Musk to navigate this brand tornado crisis and get onto the other side of this dark chapter for Tesla.”
With his high profile, confrontational statements and postings on social media, Musk has become a lightning rod for people opposed to the policies of the Trump administration.
A CNN poll last month found just 35% of Americans express a positive view of Musk, with 53% rating him negatively, making him both better known and more substantially unpopular than Vice President JD Vance (whom 33% of Americans rate favorably and 44% unfavorably.)
Those negative opinions of Musk are bleeding over into negative views of Tesla, especially among those who identify as liberals. Those Americans are a segment of the car buying market most likely to be interested in buying a green electric vehicle.
I wrote about this dynamic months ago. Musk has turned off a lot of left-wing potential buyers for his products and there never has been a right-wing market for his cars in the US. His political enemies are refusing to buy and so are his political allies, with the notable exception of President Trump.
But the situation for Tesla is even worse in Europe.
Musk, the world’s wealthiest person, has also involved himself in European politics, promoting the anti-immigrant AfD party in Germany in February’s elections. Tesla’s business on the Continent is struggling.
Across 15 European countries, Tesla’s market share declined to 9.3% in the first quarter from 17.9% in the same period a year earlier, according to data tracked by EU-EVs.com. In Germany, Tesla’s market share in battery electric vehicles plummeted to 4% from about 16% over that stretch.
Even in Norway, which has about 90% EV adoption, Tesla sales are down because of Musk’s politics.
If there is anyplace Tesla should be thriving, it’s Norway. Electric vehicles account for more than 90 percent of new car sales in the Scandinavian country, and buyers here are among the most sophisticated in the world when it comes to understanding the nuances of batteries, charging and range.
So it hardly bodes well for Tesla that its sales in Norway have declined more than 12 percent so far this year. Sales for the first three months of the year were even worse in Denmark, France, the Netherlands and Sweden…
Andrea Fresk’s Tesla is caked with a thick layer of late-winter grime, a state of neglect she said reflected her ambivalence toward the vehicle that she and her husband took out a 10-year loan to buy in 2019.
After Mr. Musk bought the social media company Twitter, she began feeling increasingly ashamed about owning the Tesla, but it got worse after Mr. Musk became a regular presence in the Trump administration.
“Then it became really hard to defend having this car,” said Ms. Fresk, a psychologist with Norway’s public family services.
Has the negative impact on Tesla finally gotten to Musk? Politico Magazine has a story up today claiming that President Trump recently suggested Musk would be leaving his post at DOGE sometime soon.
President Donald Trump has told his inner circle, including members of his Cabinet, that Elon Musk will be stepping back in the coming weeks from his current role as governing partner, ubiquitous cheerleader and Washington hatchet man.
The president remains pleased with Musk and his Department of Government Efficiency initiative, but both men have decided in recent days that it will soon be time for Musk to return to his businesses and take on a supporting role, according to three Trump insiders who were granted anonymity to describe the evolving relationship…
The transition, the insiders said, is likely to correspond to the end of Musk’s time as a “special government employee,” a special status that temporarily exempts him from some ethics and conflict-of-interest rules. That 130-day period is expected to expire in late May or early June.
So that day is probably approaching quickly. That may be enough to win over some critics and investors who see DOGE as a distraction from Musk’s leadership at Tesla. However, I don’t think the left-wingers who have turned on Musk are likely to forget. As we’ve seen with sales of Bud Light, angering a large group of people with your politics can linger over your business for quite a while. Last month, Fox Business reported this.
Bud Light has not yet recuperated from the Dylan Mulvaney controversy, according to a former Anheuser-Busch executive.
“They haven’t at all [recovered],” former Anheuser-Busch President of Operations Anson Frericks said Tuesday during an interview on FOX Business’ “Varney & Co.”…
“I think that’s one of the most interesting parts about this story is that they lost 30% of their customers,” he pointed out. “Millions of customers, billions of dollars of shareholder value over the last couple of years.”
Personally, I have even more respect for Elon Musk being willing to put himself forward to lead DOGE despite the potential costs to his personal business empire. But unfortunately, I don’t think he’ll be able to reverse course anytime soon. The angry progressives in Europe and the US won’t forget. They will continue to punish Tesla for many years to come.
Read the full article here
