Tesla's first-quarter deliveries slump on Musk backlash, weak demand

Tesla's first-quarter sales dropped 13%. This is its weakest performance in nearly three years. The decline follows CEO Elon Musk's embrace of far-right politics. Consumers are also looking for newer models from rival electric vehicle makers.

Shares of Tesla fell about 6% in early trading on Wednesday. The company sold 336,681 vehicles from January to March. Last year, Tesla delivered 386,810 units. Analysts expected sales of around 372,410 vehicles this quarter.

Sales in Europe and China have decreased despite rising electric vehicle purchases. Tesla cars and dealerships have faced vandalism globally. Analyst Dan Ives from Wedbush Securities described the numbers as a disaster.

Last year, Musk predicted 20% to 30% sales growth by 2025. He promised an affordable vehicle would launch in the first half of this year. However, his advisory role to former President Donald Trump has upset some customers.

Brian Mulberry from Zacks Investment Management expressed concerns over declining margins and sales. Protests at Tesla stores in the U.S. and Europe have increased recently. Some data shows more Tesla owners are trading in their vehicles.

Investors are watching if refreshed models like the Model Y can boost demand. They are also considering incentives against competition from Chinese rivals like BYD and European brands such as Volkswagen and BMW.

BYD is expected to surpass Tesla as the top global EV seller this year with a market share of 15.7%. Tesla's market share stands at 15.3%, according to Counterpoint Research.

In March, Tesla's sales fell again in key European markets like France and Sweden for the third consecutive month. The refreshed Model Y launched with updated styling in China in late February and in the U.S. and Europe last month.

Data indicates significant declines in Tesla sales during January and February across major markets like the U.S., Europe, and China.

Tesla plans to launch a lower-priced model based on its existing platform this year but hasn't provided details yet. The Cybertruck pickup launched late last year has seen limited demand due to design issues and quality concerns.

Recently, Tesla recalled nearly all Cybertrucks for potential exterior panel problems. While it may face less impact from new tariffs due to U.S.-based manufacturing, Musk noted that cost implications are significant.

Tesla has also warned about possible retaliatory tariffs following these levies.