Backlash against Musk causes Tesla’s biggest ever global quarterly sales slump

Tesla has confirmed its global electric vehicle sales slumped to 336,681 in the March quarter – a 13 per cent fall from the same quarter last year and well below analyst forecasts that had already been revised heavily downwards in response to the public and consumer backlash against CEO Elon Musk.

The number announced by Tesla on Tuesday (US time), compares to forecast averages of more than 440,000 for the quarter from Wall Street analysts, and last year’s number of 387,000, when it was affected by factory shutdowns and a fire at the Berlin gigafactory, and deliveries of 422,000 in the first quarter of 2023.

Tesla cited the fall on the changeover of Model Y lines, but Wall Street analysts had already taken this into account in their original forecast before being taken aback by the public response, and possibly the intensity of the competition from Chinese EV makers.

“While the changeover of Model Y lines across all four of our factories led to the loss of several weeks of production in Q1, the ramp of the New Model Y continues to go well,” the company said in a statement. “Thank you to all our customers, employees, suppliers, shareholders and supporters who helped us achieve these results.”

The fall is being described by analysts as the company’s biggest ever quarterly sales slump, year on year. The total comprised 323,800 Model Y and Model 3 vehicles and 12,881 Model S and Model X vehicles. As usual, there was no breakdown of individual models or markets.

One Wall Street analysts has described the events at Tesla – and the plunge in sales – as the “greatest destruction of brand value” ever seen in the auto industry. Protests against Musk have become widespread across north America and Europe, and companies and governments have dumped Tesla EVs from their fleets or rebate programs.

Analysts have also expressed concern that Musk is not properly focused on his job at Tesla, citing his work as head of Doge and his relentless political campaigning. Musk reportedly spent more than $US20 million in support of a right wing judge running for the Supreme court in the state of Wisconsin. His preferred candidate was heavily defeated.

“It has turned into a brand crisis, a brand crisis tornado,” Dan Ives, the head of Wedbush Securities, and one of the most bullish investors in Tesla, said a few weeks ago.

“It has turned into a brand crisis, a brand crisis tornado. The future of Tesla will really be determined by how Musk handles the next few months, it is that much of a white knuckle moment.”

As Tesla sales slump, BYD has enjoyed a record March quarter, with its global sales of full battery electric cars surging 39 per cent to 416,000, giving it a commanding lead over Tesla as the biggest seller of EVs in the world.