Tesla reported a 13% decline in its first-quarter auto sales on Wednesday, primarily attributed to lower production during factory upgrades and backlash over CEO Elon Musk’s involvement with former President Donald Trump’s administration. The company delivered 336,681 vehicles in the quarter ending March 31, falling short of analyst expectations. Tesla pointed to “several weeks of lost production” as it focused on upgrading its Model Y manufacturing.
Following the report, Tesla’s stock dropped over 6% in early trading but later recovered somewhat.
This slump in vehicle sales raises concerns about Musk’s leadership at the company, which has faced consumer boycotts and vandalism, especially with his controversial role in government job cuts.
Dan Ives, a well-known technology analyst from Wedbush, described the sales figures as “a disaster on every metric.” He emphasized that this situation is a pivotal moment for Musk, urging him to clarify how he plans to balance his responsibilities at Tesla with his political commitments.
Ives added, “The more political he gets, the more the brand suffers… This quarter is an example of the damage Musk is causing Tesla.”
Although Tesla has long been seen as poised for significant growth, with its advances in autonomous driving and AI, the report hints at challenges. Tesla did not break out sales for its highly anticipated Cybertruck, but analysts speculate that sales for the vehicle have been weak. This follows a recent recall of nearly all Cybertrucks due to a defect that could cause an exterior panel to detach, posing a crash risk.
While the company did not provide country-specific delivery numbers, figures from national automotive authorities show a significant sales drop in Europe, where Musk’s ties to Trump have been controversial. Sales fell by over a third in France, nearly two-thirds in Sweden, and 56% in Denmark during Q1.
Tesla shareholder Ross Gerber, who has previously criticized Musk’s leadership, expressed frustration on X (formerly Twitter), writing, “These numbers suck. The Cybertruck is basically not selling. The brand is broken and may not be fixable.”
By 14:40 GMT, Tesla’s shares had fallen by 2.7%.
AFP
