NEW YORK (AP) β Tesla sales fell 13% in the first three months of the year, another sign that Elon Muskβs once high-flying car company is struggling to attract buyers.
The leading electric vehicle maker has faced a growingΒ backlashΒ from Muskβs 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.
Teslaβs 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 ofΒ Chinaβs 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 companyβs 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 βdisaster on every metric.β
βTheΒ brand crisis issuesΒ are clearly having a negative impact on Tesla…there is no debate,β he said.
Musk has been President Donald Trumpβs point man in his effort to cut government spending. As criticism of Musk mounted and Teslaβs sales and stock price slumped, Trump last month held an extraordinaryΒ press conference outside the White HouseΒ in which he praised Tesla, blasted boycotts against the company andΒ bought a Tesla himselfΒ 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 Cityβs comptroller overseeing pension funds holding Tesla stock called for a lawsuit accusing a distracted Musk of βdriving Tesla off a financial cliff.β
After falling as much as 6% in early Wednesday, Tesla stock shot up more than 5% on indications that Musk may soonΒ return his attentionΒ 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.
Teslaβs 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 theΒ protestsΒ or other factors.
Still, even bullish financial analysts who earlier downplayed the backlash to Muskβs polarizing political stances are saying it is hurting the company, something that Musk also recently acknowledged.
βThis is a very expensive job,β Musk said at aΒ Wisconsin rallyΒ on Sunday, referring to his DOGE role. βMy 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, βI bought this before Elon went crazy.β
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 aΒ Nazi-like saluteΒ 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 Teslaβs 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.
