Tesla, the American electric vehicle manufacturer, continues to struggle with poor sales. After revealing a new model in March, it aimed for a rebound; however, sales in major markets such as the U.S. and Europe dropped significantly. It has been pointed out that the leadership has weakened due to Elon Musk, Tesla's Chief Executive Officer (CEO), becoming distracted by political affairs, leading to an inability to respond effectively to the competitive pressure and changes in the market environment.
On the 6th (local time), major foreign media outlets including Reuters reported that Tesla's sales in key European countries last month showed a double-digit decline compared to the same month last year. Sales in the UK fell to 536 units, down 62% from 1,404 units in April last year, while sales in Germany decreased by 46% to 885 units. Sales in France and Spain also dropped by 59% and 36%, respectively, compared to the same period last year.
Earlier in March, Tesla unveiled the new model, Juniper, of its flagship mid-sized Sports Utility Vehicle (SUV) Model Y in Europe. Typically, when a new volume model is released, overall sales tend to rebound; however, Tesla did not experience the effects of the new vehicle, and sales fell even further.
Many interpretations suggest that Tesla's sales struggles in Europe are due to Musk's political distractions. As U.S. President Donald Trump initiated hostile foreign policy measures, including mutual tariff impositions aimed at various countries including Europe, resentment toward Musk, who is considered one of Trump's closest confidants, grew, significantly tarnishing Tesla's brand image.
In the automotive industry, there are analyses suggesting that the reasons for Tesla's sales decline extend beyond just CEO Musk's political activities. With the improvement of competitors’ quality, including Hyundai Motor and Kia, as well as Germany's Volkswagen and China's BYD, there is a widespread opinion that Tesla's dominance in the electric vehicle market is being shaken.
While Tesla's sales have decreased in Europe, competitors are making gains. Last month, Volkswagen sold 2,314 units in the UK, a 194% increase compared to the same month last year. BYD recorded a sales increase of 311% to 1,419 units during the same period. While Chinese electric vehicle companies face high tariffs in European Union (EU) countries, they are not subject to these when selling in the non-EU UK, leading to rapid growth recently.
Tesla's total sales for the first quarter of this year numbered 336,681, a decrease of over 10% compared to 386,810 units during the same period last year. According to Cox Automotive, a U.S. automotive market research firm, sales in the U.S. are estimated to have also dropped by 8.6% to 128,100 units compared to the same period last year.
While CEO Musk diverted his attention to politics, BYD, which has competed with Tesla for dominance in the global electric vehicle market, achieved significant results in sales and technology. BYD announced in March that it developed ultra-fast charging technology that can travel 400 km on a 5-minute charge, surprising the electric vehicle and battery industries.
From the beginning of this year until April, BYD sold a total of 612,128 electric vehicles. Excluding April's sales (195,740), the first quarter sales exceeded 410,000 units, around 80,000 units more than Tesla. While a significant portion of its total sales comes from the domestic Chinese market, there is also a rising trend in market share in overseas markets, such as Southeast Asia and Latin America.
The Wall Street Journal (WSJ) reported on the 30th of last month that Tesla's board has been looking for Musk's successor for about a month. Although Musk and Tesla's board denied the claims as untrue, there are concerns in the industry highlighting the serious situation regarding the absence of leadership at Tesla and the resulting management crisis.
An automotive industry insider noted, "There is still significant resentment toward the Trump administration, and the technological gap between Tesla and other electric vehicle manufacturers in areas such as autonomous driving and battery charging technology has significantly narrowed," adding, "Even if Musk returns, it is uncertain that Tesla will rebound quickly."