In a recent downturn for electric vehicle giant Tesla, the company experienced a sharp decline in sales throughout April in a number of European countries. This development indicates potential challenges for CEO Elon Musk as he returns his focus from governmental responsibilities back to managing the automaker.
In April, Tesla’s sales suffered substantial drops compared to the previous year across various countries. Sweden, the Netherlands, and Denmark reported declines exceeding two-thirds, as revealed by local automotive organizations and government entities. Additionally, Tesla’s sales in France decreased by 59%, and Norway saw a 38% reduction. While these nations do not constitute a majority of Tesla’s sales globally, they are among the first to disclose April’s sales data, offering an early indication of potential challenges elsewhere for the company amid recent boycotts and protests following Musk’s political involvement.
Germany, another crucial market where Musk controversially recommended a politically extreme candidate, has yet to release its figures for April. However, there has already been a 62% decrease in sales for the first quarter this year. Financial experts are increasingly concerned about the negative reception Musk’s political moves have garnered. Despite this, they remain cautious about attributing the sales dive solely to political factors, as several other elements may be in play.
These include an outdated lineup of Tesla models and the emergence of new competitors in the electric vehicle market, notably from Chinese company BYD. Furthermore, Tesla’s factory shutdowns earlier this year, necessitated by upgrades to the popular Model Y SUV, limited production capacity. The brand is still awaiting European regulatory approval for its semi-autonomous driving features, a key selling point that has driven sales in both the United States and China.
Seth Goldstein, an analyst at Morningstar, acknowledged the possibility of a sales recovery contingent on regulatory approval but stressed, “April’s substantial decline is certainly alarming.”
These disappointing results coincide with Musk’s recent discussion with investors regarding his reduced involvement with governmental duties, intending to redirect his attention to Tesla’s operations. Musk has been actively working with the Department of Government Efficiency. On a recent conference call, Musk mentioned his plan to dedicate only one to two days per week on government-related activities starting in May.
Despite the recent financial setbacks, including a 71% reduction in first-quarter profits, Tesla’s stock value has been rising since Musk’s announcement to reposition his focus. April’s data saw the most significant sales reduction in Sweden, with a sharp 81% drop, followed by the Netherlands at 74% and Denmark at 67%. The Norwegian Road Traffic Information Council’s figures showed a 38% decline in that country.
However, Tesla’s performance wasn’t dismal across Europe; in Italy, the company managed to achieve a 3% sales increase, according to the Ministry of Infrastructure and Transportation’s report for the month.