Tesla’s first-quarter sales slumped 13%, its weakest performance in nearly three years, in a backlash to CEO Elon Musk’s embrace of far-right politics and as consumers seek out newer models from rival electric-vehicle makers.
Shares of the automaker fell about 6% in early trading on Wednesday as the company recorded a bigger-than-expected drop in sales to 336,681 vehicles in the January-March period.
A year ago, Tesla had delivered 386,810 units and this time the expectation was for 372,410 vehicles, according to an average estimate of 15 analysts from Visible Alpha.
The automaker’s sales in Europe and China have slumped even as more people buy electric vehicles, while Tesla cars and dealerships globally have become targets for vandalism.
“We are not going to look at these numbers with rose-colored glasses…they were a disaster on every metric. The Street and us knew a bad 1Q was coming but this was even worse than expected,” said Wedbush Securities analyst Dan Ives.
Last year, Musk forecast 20% to 30% sales growth in 2025, promising to launch an affordable vehicle in the first half of the year.
But his advisory role to U.S. President Donald Trump, through which he has been instrumental in firing thousands of federal workers and cutting humanitarian aid, has sparked discontent among some customers.
“In the near term it is understandable to worry over declining margins and sales in the same moment impacting earnings growth and revenues,” said Brian Mulberry, client portfolio manager at Tesla shareholder Zacks Investment Management.
Protests at Tesla stores in the U.S. and Europe have spiked. Some data indicates a rise in Tesla owners trading in their vehicles.
Meanwhile, investors are waiting to see if refreshed models like the Model Y and incentives have helped counter weak demand and tough race from Chinese rivals including BYD and European competitors such as Volkswagen and BMW.
China’s BYD is set to unseat Tesla as the top global EV seller for the first time this year with a 15.7% market share, ahead of Tesla’s 15.3%, according to Counterpoint Research.
Tesla’s sales in key European markets fell again in March, with sales in France and Sweden dropping for a third straight month.
Tesla began offering the refreshed Model Y with updated styling and enhanced interiors in China late February and in the U.S. and Europe last month.
Data from auto industry associations and analyst estimates point to notable declines in Tesla sales during the first two months of the year in the U.S., Europe, and China.
Tesla has indicated plans to launch a lower-priced model based on its existing platform this year, but is yet to release specific details about the vehicle.
Its pricey Cybertruck pickup, launched in late 2023, has seen limited demand due to its polarizing trapezoidal design and quality concerns.
Tesla recently recalled nearly all Cybertrucks to address a potential exterior panel issue.
While Tesla may see less pain from the new 25% tariffs on imported vehicles due to its U.S.-based manufacturing, Musk has said cost implications are “significant”.
Tesla has also warned about potential retaliatory tariffs in response to the levies.
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