NEW YORK — Tesla’s sales of electric vehicles experienced a considerable dip over the past three months, amid ongoing consumer boycotts influenced by Elon Musk’s political alignments. The 13% drop in worldwide sales compared to the previous year indicates that the impact on Tesla’s reputation, spurred by Musk’s support for U.S. President Donald Trump and certain right-wing European politicians, is more profound, widespread, and enduring than some market analysts initially anticipated. Tesla’s announcement made on Wednesday further implies that the upcoming earnings report, scheduled for later this month, might underperform as competitors in the electric vehicle market capitalize on Tesla’s weakened standing to capture its market share.
Sales figures dropped to 384,122 units from April through June, a decline from the 443,956 units sold during the corresponding period last year. During this timeframe, Musk officially departed from the Trump administration in his role as a cost-cutting advisor, sparking anticipations of a resurgence in sales. Although Musk recently indicated that the company was experiencing a significant sales rebound, the latest statistics seem to contradict this claim.
Despite the challenges, there were some positive aspects to the report. Sales of the Model 3 and Model Y reached 373,728 units, exceeding Wall Street analysts’ estimates of 356,000. This revelation prompted a 5% rise in Tesla’s stock value. Morningstar’s Seth Goldstein commented on the results, noting that while they were better than anticipated post the numerous analyst forecast revisions, it was evident that the company still faces significant hurdles. Goldstein emphasized that Tesla’s current product lineup has reached market saturation, necessitating the introduction of a more affordable vehicle to boost deliveries.
Elon Musk has pledged the launch of a cheaper electric vehicle model this year, aiming to enhance sales. However, it remains uncertain whether Musk’s recent dispute with Trump might attract back those buyers frustrated with his political stances. Following Musk’s social media criticism of Trump’s budget bill, the President responded on Tuesday by threatening to leverage his office’s power to adversely affect Musk’s ventures, including Tesla, which resulted in a more than 5% drop in Tesla’s stock.
A June poll revealed that approximately half of U.S. adults hold an unfavorable view of Tesla, with 30% of Republicans included in this segment. Meanwhile, Tesla is redirecting its focus from launching new models to innovations in robots, self-driving technologies, and autonomous taxis designed for passenger transport without a driver. Currently, a test run for these robotaxis is underway in Austin, Texas, and while generally successful, it has attracted attention from federal road safety agencies due to some incidents such as a captured video showing a Tesla taxi traveling in the opposite lane.
In Europe, competition from other electric vehicle companies is particularly fierce, as Chinese automaker BYD has begun carving out a portion of the market share. Notably, Tesla’s sales in May decreased by 28% across 30 European nations, despite a notable increase in the general market for electric vehicles according to the European Automobile Manufacturers’ Association. Musk has admitted that his involvement with the Government Efficiency Department and his support for European right-wing candidates have adversely affected Tesla’s sales. Nonetheless, he attributed much of the sales decline earlier this year to consumers waiting for the updated version of the top-selling Model Y, which has already been on the market for several months.
Tesla is set to release its second-quarter financial figures on July 23, with the first quarter having seen a 71% drop in net income.