Tesla faces continued decline in sales as boycott against Musk gains traction and competitors seize opportunity

Tesla, known for its electric cars, has experienced a significant decline in sales over the past three months. This downfall is largely attributed to consumers boycotting the brand due to Elon Musk’s political affiliations, most notably his ties to U.S. President Donald Trump and far-right European politicians. The 13% decrease in global sales from the same period the previous year is indicative of a broader and more lasting negative impact on Tesla’s reputation than initially anticipated by investors.

The sales for April to June of this year dropped to 384,122 units from 443,956 units in the same timeframe in the previous year. The decrease in sales comes despite Musk formally parting ways with the Trump administration and the hopes of a sales recovery. Musk himself has mentioned that Tesla is going through a significant sales uptick, a claim that doesn’t align with the latest sales figures.

However, there are some positive aspects within the report. Sales of Tesla’s Models 3 and Y combined reached 373,728 units, surpassing the Wall Street analysts’ estimate of 356,000 units. Consequently, Tesla’s stock saw a 5% rise upon this news. According to Morningstar’s Seth Goldstein, the earlier predicted severe decline in sales didn’t materialize, but the overall report still highlights the formidable challenges confronting the company. It’s suggested that Tesla’s existing product range has reached a market saturation point, and the introduction of a more affordable electric vehicle model is crucial for growth in deliveries, a point Musk himself has promised to address by launching a cheaper EV model.

Despite attempts to revive sales, Tesla’s fortunes might not improve due to Musk’s latest public feud with Trump. Following Musk’s critical remarks on Trump’s budget bill, the president has threatened retaliatory action against Tesla and other Musk-led companies, causing Tesla’s stock to drop by more than 5%. With consumers already deterred by Musk’s political stance, this latest dispute might further diminish Tesla’s appeal to potential buyers.

In conclusion, Tesla’s recent plunge in sales underscores the enduring boycott driven by consumer dissatisfaction with Musk’s political alignments. As Tesla grapples with a challenging sales environment, the company’s future success hinges on its ability to introduce new, more affordable electric vehicle models and navigate the complexities of Elon Musk’s ongoing political entanglements.