Tesla (TSLA) investors are preparing for a drop in the automaker’s sales in the first quarter, pressured by the public reaction to the presence of Donald Trump’s Elon Musk’s government and more intense competition at a time when the company’s product line shows signs of aging.
Tesla is expected to publicize sales and first-quarter production numbers on Wednesday (2). The company’s shares fell more than 7% on Monday and accumulates low of 35% this year.
Musk promised that Tesla would grow again this year after the company’s annual sales fell for the first time in 2024. Wall Street will be attentive to see how a newer version of SUV Model Y and incentives granted by the company impacted the automaker’s sales.
Tesla has been facing increasing competition, especially in China and Europe, and protests against the role of Musk in the supervision of US spending cuts. This annoyed a widely liberal base of Tesla buyers and the data show that Tesla car owners are changing their vehicles at record levels.
“We have seen a great deterioration of the Tesla brand worldwide,” said Ken Mahoney, Mahoney Asset Management, who has Tesla actions. “The brand became much more politicized than any public company brand should want to be.”
Wall Street expects Tesla to sell about 373,000 vehicles from January to March, according to an average of 15 estimates of analysts compiled by Visible Alpha. This would represent a 3.6% drop over the same period last year, when the company sold 386,810 vehicles.
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Even the updated average estimate can be very optimistic, according to some investors and analysts.
“I think the numbers will be below 400,000 and perhaps up to 350,000,” said Thomas Martin, senior portfolio manager of Globalt Investments, Tesla’s shareholder.
Deutsche Bank analysts expect between 340,000 and 350,000 Teslas to have been sold in the quarter.
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Tough times
Data from automotive associations and analysts estimates showed sharp declines in Tesla sales in the first two months of the year in the US, Europe and China.
In addition to the malaise with the economy, which reduced people’s appetite for high value purchases, the demand for Tesla cars was also affected, as some potential customers have waited for an up-to-date version of the company’s best-selling Model Y.
Tesla began selling the updated model Y, which now comes with full -width front lights, a touchscreen on the rear seat and improved interiors, last month in China and this month in the US and Europe.
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Tesla said earlier that it would launch a more economical model based on existing platforms this year, but has not provided details.
The demand for the Cybertruck pickup, which was launched in late 2023 after several delays, was also low, with its trapezoidal design and the highest price than promised keeping buyers away. Concerns about the quality of the pickup has plagued the automaker, and Tesla has recall almost all Cybertrucks in the US this month to fix a problem where an external body panel can come loose while driving the vehicle.
BICKE TO TESLA
The company has been offering discounts and other incentives, including low cost financing. But these incentives seem to have had little impact on Europe, where sales fell in the first two months of the year. Consumers were discouraged by Musk’s support to Trump’s right -wing policy and gestures and controversial statements of the executive that were harshly criticized.
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Tesla Takedown protests in countries such as Germany and Finland have expanded criticism against Musk in the US, where the billionaire has been a centerpiece in Trump policies for mass layoffs of civil servants and cutting humanitarian initiatives.
Teslas were set on fire in Las Vegas, and the vandalism incidents in the automaker’s stores increased. Trump said violence against ally company that has injected millions of dollars into his election campaign to be considered domestic terrorism.
Teslas sales manufactured in China also fell. Chinese rivals, including BYD, intensified the price war and launched at least six models last year to face Model Y.
