Tesla is about to reveal its car delivery statistics for the first quarter on Wednesday, and analysts anticipate a significant drop in sales. This decline is attributed to Elon Musk's political controversies, a slowing electric vehicle market, and heightened competition.
During the first quarter, Tesla's stock plummeted by 36%, resulting in the loss of around $460 billion in market value and undoing gains made since the US election day. Elon Musk expressed the challenges of his government role as the head of the Department of Government Efficiency at a town hall in Wisconsin, mentioning the significant personal cost. President Donald Trump hinted at Musk's imminent departure from his government position to focus on his company responsibilities once again.
Musk's political engagements, both domestically and internationally, seem to have impacted Tesla's sales negatively. In Europe, Tesla witnessed a sales decline after Musk endorsed Germany's far-right party. The company sold 19,046 cars in Europe in the first two months of the year, marking a 49% decrease from the same period last year. Conversely, electric vehicle sales in the European Union overall increased by 28.4%, capturing a 15.2% market share.
In China, Tesla's shipments dropped to 30,688 cars in February, a 49% decrease compared to the previous year, while new energy vehicle sales surged by 82%. Despite facing backlash due to Musk's involvement in federal job reductions, Tesla's US sales for the initial two months of 2024 surpassed last year's figures. Trump's proposed auto tariffs are not expected to significantly impact Tesla, given that all products and components sold in the US are made domestically.
Analysts now anticipate Tesla to deliver 390,000 vehicles in the first quarter, down from the initial Wall Street projection of 460,000. This forecasted figure would represent Tesla's lowest quarterly delivery number in a year. Sales in the first quarter typically tend to be lower for Tesla due to seasonal factors. Despite momentarily suspending part of its production lines in Shanghai for three weeks during the Chinese New Year, Tesla might struggle to achieve year-on-year growth in 2025 if current trends continue.