Tesla's Delivery Slump: Production Tweaks and Musk's Political Controversies Take a Toll

Tesla saw its vehicle deliveries fall to a near three-year low in the first quarter as the electric carmaker grappled with production line adjustments and CEO Elon Musk’s controversial actions, which have sparked international backlash. Across the first three months of the year, Tesla reported deliveries of 336,681 vehicles, marking the lowest quarterly figure since Q2 2022. Analysts had anticipated sales exceeding 390,000 vehicles, highlighting the disruption Tesla has faced at the start of the year.

The dip in deliveries is partly attributed to the global adjustments Tesla undertook on its production lines to accommodate the revamped Model Y. Such shifts are typical when automakers update their models. However, Musk’s immersion into global political affairs has fueled waves of protests across the US and Europe, impacting Tesla’s reputation. Following the news, Tesla shares initially slid by 6.4%, further contributing to the ongoing downward trajectory since the stock hit an all-time high post-Trump's electoral win, recording a 44% decrease by Tuesday's close.

Despite Musk’s optimistic declarations that Model Y would again be the world’s best-selling car this year, the company hasn’t clearly acknowledged the reasons behind the delivery dive. Market sentiment suggests Musk's deep involvement in geopolitics may have harmed Tesla’s standing in the US and European markets. Additionally, in Europe, Tesla's market share has reportedly dropped, with figures in Germany declining from over 16% to less than 4% amid waning appeal.

In an interview, Musk conceded that his governmental role in the US has negatively impacted his companies, hinting at losses tied to his political responsibilities. Allegedly, his support for Germany's far-right political party AfD has also stirred dissatisfaction. Meanwhile, a suspicious fire at a Tesla showroom in Rome earlier this week led Musk to label it as a “terrorist act,” showcasing the disturbances surrounding the brand.