Tesla, the disruptive electric vehicle manufacturer, just reported its worst quarterly deliveries in more than two years. The company is now experiencing swelling pains and pushback toward their CEO, Elon Musk. The automaker’s stock recently hit its lowest performance since 2022, reflecting a growing concern among investors about the impact of Musk’s actions and statements on the company’s sales.
Declining Deliveries and Production Slowdown
With Tesla’s first quarter of 2024 production results, at 362615 vehicles. This is a drop from historic highs in prior years. The decrease is partially attributed to the move of production lines for its new Model Y refresh. As far as hype and excitement goes, the Cybertruck has delivered. All that buzz hasn’t translated into boosted sales numbers.
Tesla missed the potential volume by a long shot with just 336,681 total deliveries during this 10-week window. That’s a huge decrease and the company’s deepest cut in memory. Analysts had predicted Tesla would come in with deliveries at least near 408,000 EVs, per FactSet data. Analysts are taking another look at their predictions for the company. So much in fact that they’ve recently downgraded their expectations to under 400,000 units.
June sales numbers are a clear indicator that we’ve experienced a dramatic shift in the market. In Sweden, Tesla sales were down a horrific 64% for the month of March all by itself. Sales in Germany took a tanking, falling by 76%. Only 1,429 units sold through their door, a far cry from the 6,038 units sold in the 3rd quarter of 2024. His controversial endorsement of Germany’s far-right AfD party during that country’s national election last month was the match that ignited the backlash. Most consumers have responded to his support with harsh criticism.
Tesla has a hard row to hoe in its dominant market, China, where local manufacturers like BYD and Geely give it stiff competition. That’s why the company’s sales of Shanghai-made vehicles plummeted in March. According to the China Passenger Car Association, Tesla sold a whopping 78,828 EVs in China just in March alone. This constitutes an 11.5% drop from the same month in 2022. We rolled out 0% financing on the new Model Y lineup in China to boost sales. None of these efforts have moved the needle in terms of real, measurable improvements… yet.
In March, Tesla’s year-over-year deliveries in France were down 37%. The company only sold 3,159 units total in that month. Together, these figures reflect a wider trend of increasingly weak sales in Europe and China during the first quarter.
Market Backlash and Long-Term Concerns
This increasing backlash against Musk leaves the market to wonder how his actions are going to impact Tesla’s long-term favorable market performance. These protests, dubbed “Tesla Takedown,” have only added to the company’s PR nightmare. Analysts are starting to raise red flags over these macroeconomic headwinds and how they might threaten Tesla’s long-term growth potential.
Even amid these hurdles, some analysts are still bullish on Tesla’s ability to turn things around. Electric avenue Of course, they are quick to remind us, the brand is still the leader in the EV space. Unless Tesla addresses its production issues and navigates the controversies surrounding Musk more effectively, it may continue to face significant headwinds.
Author’s Opinion
Tesla’s performance decline is clearly tied to a combination of production issues, market saturation, and Musk’s controversial actions. While the company remains a leader in the EV space, it will need to address these challenges quickly to maintain its competitive edge and prevent further damage to its reputation.
