Tesla posted a historic 13% sales decline in the first quarter of 2024 as the company fought through negative public perception toward Elon Musk along with increasing competition from other electric vehicle manufacturers. The company shipped 336,681 units during the quarter marking its largest delivery decrease since 2021 when it reported 50,000 fewer cars compared to the previous year.
Angry protesters now demonstrate outside Tesla retail locations because of the criticism directed at CEO Elon Musk as well as the opposition to Trump administration policies. Tesla charging stations along with their cars have come under vandalism attacks which could be deterring potential customers. Tesla did not address the ongoing civil disturbances in their official statement because they pointed to model Y production adjustments which halted all factory operations for several weeks. “Gratitude to our customers, team, suppliers, shareholders, and supporters for these results,” it said.
The predicted sales levels of 350,000 failed to prepare analysts for the actual extent of the market decline. Tesla does not break down its sales data by geographic area yet European sales data suggests a major decline because deliveries in the region decreased by 49% during January and February according to the European Automobile Manufacturers’ Association when total electric vehicle sales in the region increased by 28%. Tesla’s vocal support of right-wing political parties in Germany and the UK seems to have triggered this intense opposition.
The company faces increasing competition from the global market especially in China because it holds the position of world leader for electric vehicles and is Tesla’s second-largest market after the United States. The Chinese electric vehicle manufacturer BYD regained its position as the world’s leading EV seller after it delivered 416,000 pure electric vehicles this quarter which represented a 39% increase from previous year numbers. Tesla maintained its annual sales lead above BYD throughout previous years despite BYD leading Tesla in quarterly sales numbers. The annual sales rankings between Tesla and BYD could reverse positions during 2025 based on present market trends.
The combination of market competition with Elon Musk’s involvement produces significant negative impact on the company. The EV market leadership Tesla once held strongly has weakened as BYD and multiple other competitors launch competitive and reasonably priced products. The production interruption failed to improve matters but Tesla now faces unprecedented challenges due to both intense consumer discontent and increasing competition in the market.
