Tesla sales plunged 13% in the first three months of this year, as the company reported the largest drop in deliveries in its history by far, amid backlash against CEO Elon Musk and as growing competition from other automakers’ electric vehicles took a large bite out of demand for its EVs.
Tesla reported that it delivered 336,681 cars in the quarter, compared to 386,810 in the first three months of last year. The Wednesday data represented the company’s worst sales in nearly three years, a drop of 50,000 vehicles from a year ago.
Tesla has faced protests outside its showrooms from those opposed to the actions of Musk in one of his other roles as the head of the Department of Government Efficiency, and the policies of President Donald Trump.
There have also been instances of vandalism against Tesla facilities, including its charging stations, as well as some cars. All these incidents may have discouraged some potential Tesla buyers from going ahead with their purchases.
Tesla did not mention of the protests against the company in its sales statement. It did, however, point to a changeover of Model Y during the quarter that temporarily halted production at all four of its factories for several weeks during the quarter.
“Thank you to all our customers, employees, suppliers, shareholders and supporters who helped us achieve these results,” the company said.
The decline was worse than expected by Tesla analysts, who had forecast quarterly sales as low as 350,000.
Tesla does not break out its sales by market. But its sales fell 49% in Europe alone in the first two months of the quarter, according to the European Automobile Manufacturers’ Association, even as EV sales overall grew 28% on the continent. That may be due to opposition to Musk in Europe, thanks to his vocal support of far-right political parties in Germany and the United Kingdom.
But even without the political controversy, Tesla is facing headwinds due to growing competition from other automakers, particularly those in China.
China is the largest market for EVs and Tesla’s second largest market, after the United States. Chinese automaker BYD reported sales of more than 416,000 pure electric passenger vehicles in the quarter, a 39% rise from a year earlier, to once again overtake Tesla as the world’s largest seller of EVs.
BYD has pulled ahead ahead of Tesla in EV sales for a number of quarters in recent years, although Tesla has always maintained the lead in full-year sales. But Tesla is poised to lose that title in 2025, given current sales trends.
BYD’s EVs are generally less expensive than Tesla, among other advantages. Earlier this month, BYD unveiled a charging system that it says will give its latest EV model 250 miles of range after plugging in for just five minutes.
But despite the competition abroad, BYD and most other Chinese EV makers do not have a presence in the US market.
Tesla shares nearly doubled in value after the presidential election on hopes that Musk’s close ties to Trump would result in policies that were advantageous to the company. But since reaching an all-time high just before Christmas, shares have lost 44% of their value through Tuesday’s close. Shares of Tesla (TSLA) tumbled about 5% in pre-market trading immediately after the sales report.
