Wedbush Securities analyst Dan Ives called Tesla’s latest results “an absolute disaster” that the company will have a hard time explaining to investors. The automaker said problems caused by traffic disruptions in the Red Sea and sabotage that curtailed production at its German factory contributed to the drop in sales in the first quarter. Analysts polled by FactSet predicted that Tesla would deliver 457,000 cars to customers in the first quarter, the AP agency wrote.
Tesla, led by billionaire Elon Musk, has recently been facing stiff competition and slowing growth in demand for electric cars. The automaker last reported a year-on-year drop in sales in the second quarter of 2020, when it had to limit production due to the covid-19 pandemic, Reuters wrote.
In China, which is the largest car market in the world, Tesla faces stiff competition from domestic carmakers such as BYD. In the fourth quarter of last year, it replaced Tesla as the largest seller of cars with a purely electric drive in the world. However, in this year’s first quarter, despite the drop in sales, Tesla returned to the top spot. BYD announced today that it sold only around 300,000 electric cars in the first quarter. While that represents a year-over-year increase of more than 13 percent, it’s down 43 percent from the fourth quarter.
Tesla shares lost over five percent around 18:00 CEST. Since the beginning of this year, they have already lost roughly a third of their value. Tesla will publish financial results for this year’s first quarter on April 23.
The decline in Tesla’s share price has a negative impact on the value of Musk’s fortune, which, according to Bloomberg data, has decreased by $40.5 billion (almost a trillion CZK) since the beginning of this year. These data do not include today’s drop in Tesla shares. According to them, with assets worth 189 billion dollars (roughly CZK 4.4 trillion), Musk is the third richest person in the world behind LVMH founder Bernard Arnault and Amazon founder Jeff Bezos.
Analyst Gene Munster of Deepwater Asset Management said this year’s first quarter was “ugly” for Tesla. According to him, high interest rates and a decline in enthusiasm for electric cars had a negative impact on sales. Nevertheless, Munster expressed optimism about the company’s long-term prospects. “I still believe that Tesla is on the right track and that this storm will pass,” he wrote on the X network.
According to surveys and expert opinions, according to Reuters, a part of Tesla’s potential customers in the United States is put off by Musk’s leanings towards right-wing politics and some of his public statements.
Tesla’s factory near Berlin had to stop production for about a week last month due to a power outage caused by a fire on a power pole. The radical left group Vulkangruppe later claimed responsibility for the sabotage in the letter.
