Tesla’s sales decline by 13% due to backlash against Musk, increased competition, and outdated product offerings.

Tesla experienced a 13% drop in sales during the initial quarter of this year, illustrating the challenges faced by the once-leading electric vehicle maker. This decline suggests a struggle in attracting buyers and has been associated with Elon Musk’s controversial political affiliations and association with the Trump administration, which has led to a backlash from various opponents staging protests at Tesla showrooms in the U.S. and Europe. The aging lineup of Tesla vehicles, including the popular Model Y, might have contributed to some customers holding off on purchases in anticipation of an updated version. Additionally, the increasing competition in the electric vehicle market, particularly from companies like China’s BYD, has weighed heavily on Tesla’s sales.

In the first quarter of the year, Tesla reported global deliveries amounting to 336,681 vehicles, marking a significant decrease from the 387,000 deliveries made in the same quarter of the previous year. Despite offering substantial discounts, financing options, and other incentives to boost sales, the results were disappointing, raising concerns about the company’s forthcoming earnings report. Financial analyst Dan Ives of Wedbush described the sales decline as a “disaster on every metric,” acknowledging that Tesla is facing brand crisis issues that are adversely affecting its performance.

Elon Musk’s involvement in political activities has sparked criticism, with some asserting that his role as President Trump’s go-to person for cost-cutting initiatives has diverted his focus from the core operations of Tesla. As Tesla’s sales and stock prices have slumped, complaints from investors have grown, leading to a call for a lawsuit accusing Musk of being preoccupied with other responsibilities, which could lead to significant financial repercussions for Tesla.

Following the decline in Tesla’s stock after the peak in mid-December, there has been speculation about Musk’s potential return to a more active role within the company. Reports suggest that Musk might step back from his governmental duties, allowing him to refocus on managing Tesla. The uncertainty surrounding Tesla has been further compounded by Musk’s acknowledgment that his political involvements have been having negative effects on the company. Musk referenced the impact on Tesla stock value, noting that it has decreased significantly during the recent period of turmoil, emphasizing the financial implications of his distractions.

The controversies surrounding Musk’s affiliations and Tesla’s brand image have manifested in various forms, from violent acts against Tesla vehicles to organized protests at numerous dealerships. The unrest has extended to Europe, where potential buyers, particularly in Germany, have expressed reservations about supporting Tesla due to concerns over Musk’s behavior. The collective sentiment among investors and market analysts is that the turbulent circumstances surrounding Tesla, partly attributed to Musk’s political engagements, are taking a toll on the company’s performance and public perception.