The company reported global deliveries of 336,681 vehicles in the first quarter, down from 387,000 during the same period last year. Despite offering steep discounts, zero financing, and other incentives, Tesla couldn’t escape the impact of growing competition and an aging lineup. Many consumers appear to be holding off on purchasing the popular Model Y, likely waiting for an updated version, while others are being swayed by improved models from competitors, especially China’s BYD.

Tesla’s once-dominant position in the electric vehicle (EV) market is being challenged by newer, more affordable EV options. This shift has taken a toll, particularly in Europe, where Tesla’s sales declines have been steeper.

A growing backlash against Elon Musk’s political involvement has also played a role in Tesla’s struggles. Musk’s embrace of right-wing politics and his position in the Trump administration have sparked protests at Tesla showrooms across the U.S. and Europe. In fact, several Tesla vehicles have been vandalized or set on fire, while protests featuring slogans like “I bought this before Elon went crazy” have become more common.

The tension around Musk’s political stances is not only hurting Tesla’s public image but also affecting its bottom line. Wall Street analyst Dan Ives from Wedbush described the first-quarter sales results as a “disaster on every metric,” noting that the brand’s crisis is clearly having a negative impact.

Tesla’s stock has taken a hit, plunging roughly 50% since December when it hit a record high. The drop came as expectations of regulatory relief under the Trump administration evaporated, replaced by concerns that the backlash against Musk’s political views and actions would seriously harm the company.

Investors have voiced frustration over Musk’s dual roles, with many claiming that his work in the Department of Government Efficiency (DOGE) is distracting him from the crucial task of leading Tesla. This week, New York City’s comptroller, responsible for overseeing pension funds that hold Tesla stock, called for a lawsuit against Musk, accusing him of “driving Tesla off a financial cliff.”

Interestingly, Tesla stock saw a rebound of more than 5% after reports that Musk might refocus on his Tesla responsibilities. Politico even cited sources suggesting that Musk could step down from his role at DOGE in the coming weeks, further boosting investor optimism.

Tesla’s challenges have been particularly pronounced in Europe. Many European customers, especially in Germany, have been put off by Musk’s public support for far-right political parties and his controversial behavior during a Trump inauguration rally. Tesla’s sales in Europe have suffered as a result, with some consumers choosing to turn to other brands that don’t carry the same political baggage.

Tesla continues to face pressure as it works to maintain its leadership in the EV market. Analysts are forecasting that Tesla’s first-quarter earnings will see a modest 7% year-over-year increase, but the overall picture remains bleak. Tesla is expected to report earnings of 48 cents per share later this month, but the company’s ability to sustain long-term growth amid fierce competition is uncertain.

Tesla’s sales for the quarter were dominated by its more affordable Model 3 and Model Y, with fewer than 13,000 of its pricier models, including the Model S, Model X, and Cybertruck, sold in that period.

As the electric vehicle market grows, Tesla must overcome a series of challenges, from political controversies and internal leadership struggles to fierce competition and an aging lineup of vehicles. The question remains: Can Tesla rebound and recapture the momentum that made it a household name, or will the company struggle to keep pace with a rapidly evolving market? Investors and consumers alike will be watching closely in the coming months as the company works through its challenges.

Source: AP News – Tesla sales tumble 13% as Musk backlash, competition and aging lineup turn off buyers

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The investigation is looking into four accidents involving vehicles using the FSD feature. In one, a pedestrian was struck in killed, according to the agency. In another, there was an injury.

In each the accidents, the Tesla car using FSD “experienced a crash after entering an area of reduced roadway visibility….from conditions such as sun glare, fog, or airborne dust,” said the agency’s statement about the start of the probe.

FSD is at the center of Tesla’s plans for future growth and profitability. The feature, which is sold as an $8,000 option, requires drivers to stay in the driver’s seat and be ready to take control of the vehicle in order to avoid accidents. But Tesla and CEO Elon Musk insist the feature is already safer than human-controlled driving, and the company has announced plans for true self-driving cars that would come without steering wheels, accelerators or brake pedals.

Musk last week unveiled plans for a fleet of self-driving “robotaxis” and a service that allows Tesla owners to rent out their cars for a ride service in order to make money when they aren’t using their cars. But while Musk has insisted such offerings would enable Tesla to become the most valuable company in the world, investors were mostly unimpressed with the presentation, sending shares of Tesla down nearly 9% the day after the evening presentation.

This is not the first time that the NHTSA has announced it is investigating Tesla’s self-driving features. In February 2023 the agency ordered a recall to change the FSD software on all of the more than 360,000 Teslas then on US roads with the feature. It found FSD “led to an unreasonable risk to motor vehicle safety based on insufficient adherence to traffic safety laws.” And it warned that FSD could violate traffic laws at some intersections “before some drivers may intervene.”

“The FSD Beta system may allow the vehicle to act unsafe around intersections, such as traveling straight through an intersection while in a turn-only lane, entering a stop sign-controlled intersection without coming to a complete stop, or proceeding into an intersection during a steady yellow traffic signal without due caution,” said the recall notice, posted on NHTSA’s website.

In December it ordered another recall of all 2 million Teslas on US roads to make software changes to limit the use of a less robust suite of driver-assist features known as Autopilot, following a two-year probe by the agency of roughly 1,000 crashes in which the feature was engaged.

Source

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