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“A nightmare.” “An unmitigated disaster.” “Any way you put it, it was ugly.”
These are just a choice selection of analysts’ reactions to Tesla’s quarterly sales report.
What happened: Like a deadbeat dad missing his child’s softball game, Tesla’s sales numbers were a massive disappointment. Despite technically regaining its title of top EV seller, the company seriously missed Wall Street estimates, sparking fears over its growth.
- Over the first three months of 2024, Tesla sold its fewest vehicles since Q3 of 2022 and — for the first time since 2020 — notched a yearly decline in quarterly deliveries.
Why it’s happening: The EV industry is in a rough patch right now as buyers can’t commit to pricey cars amid high interest rates and concerns over performance. Tesla is doing particularly poorly, thanks to an arson attack in Berlin and a steep drop in public perception.
- Research firm Caliber found that Tesla’s “consideration score” (exactly what it sounds like) fell to 31%. That’s Tesla’s lowest score since Caliber started tracking consumer interest in the company, and a far cry from its all-time-high score of 70% in 2021.
- The report found that a partial reason for this alarming decline in consumer interest stems from the erratic behaviour of and controversies surrounding CEO Elon Musk.
Why it matters: Tesla has long been the barometer of the EV industry, but this could be changing. "The EV slowdown is shaping up to be a Tesla slowdown," claimed one industry analyst, as it starts to falter for company-specific reasons, not just industry-wide ones.
Zoom out: Besides self-sabotage, Tesla’s biggest threat may be Chinese EV-makers like BYD, which are taking an increasingly larger slice of Tesla’s second-biggest market. A new competitor, Xiaomi, recently entered the fray, with its first model netting 120,000 orders in 36 hours.—QH