Tesla Faces Decline in Deliveries
Tesla recently announced a significant drop in deliveries, recording 336,681 for the quarter—its weakest performance in over two years. This decline comes amidst rising criticism of CEO Elon Musk’s political engagements, which have stirred controversy and dissatisfaction among consumers.
The decrease in sales is notable when compared to the 495,570 deliveries in Q4 2024 and 386,810 in the same quarter last year. Tesla’s production figures also showed a decline, totaling 362,615 units. This drop is attributed in part to the switch in production lines for the refreshed Model Y, which has been launched globally since March. In a statement, Tesla acknowledged that the transition caused several weeks of production loss but noted that the ramp-up of the new Model Y is proceeding smoothly.
Analysts Lower Expectations Amid Protests
Analysts had initially anticipated Tesla to report around 408,000 deliveries for the first quarter. However, as protests led by the “Tesla Takedown” movement surged across the nation and international sales waned, several analysts adjusted their forecasts to below 400,000. While Tesla does not provide a regional breakdown of its delivery numbers, it is evident that sales in both Europe and China have declined during the first quarter.
In Europe, sales plummeted by 49% year-over-year in January and February, despite an overall increase in electric vehicle sales. Particularly in Germany, Tesla’s largest market within the EU and home to one of its gigafactories, sales dropped by an alarming 76% in February compared to the previous year. This decline followed Musk’s controversial support for a far-right political party during Germany’s national elections.
Data from March indicates that this negative trend continued, with Tesla deliveries in France down 37% compared to a year prior, and in Sweden, sales fell by 64%.
Competition in China Affects Sales
In China, Tesla faced increased competition from local manufacturers such as BYD and Geely. In March, Tesla sold 78,828 EVs, marking an 11.5% decrease from the previous year. However, this was an improvement over February’s figures, which saw only 30,688 units sold.
Despite the challenges, Tesla remains hopeful that upcoming launches, including the refreshed Model Y and new lower-cost models yet to be announced, will help boost sales. Recently, the company introduced 0% financing on the refreshed Model Y range in China, aiming to attract more buyers.
Market Analysts Express Concern
Following Tesla’s delivery announcement, Dan Ives, an analyst from Wedbush, emphasized the urgency for Musk to recalibrate his focus on managing Tesla and its associated ventures. He warned of potentially “darker times ahead” for the automaker if the current issues persist.
Ives described the recent delivery numbers as disappointing and reflective of ongoing struggles within the industry, exacerbated by protests and growing concerns tied to Musk’s actions. Nevertheless, he maintained an Outperform rating on Tesla, highlighting belief in the company’s potential in the autonomous driving sector, despite the lack of full self-driving capabilities at present.
Looking forward, Tesla’s ambitions to launch a robotaxi service in Austin this summer could be crucial in determining the company’s trajectory in fulfilling the lofty expectations set by its CEO.
