Tesla, sales slump: -13% on 2024 in Q1. "Delays on Model Y"

Musk has promised a return to growth for Tesla after a drop in annual deliveries last year (-1%, first time in a decade). But falling demand and a general negative reaction against his prominence in politics could complicate matters. Musk's role as a super advisor to US President Donald Trump, with the firing of thousands of federal employees and in cutting the US humanitarian aid programme, has provoked very negative reactions from the most progressive crowd.

Protests at Tesla shops in the US and Europe have increased, and Tesla cars are being vandalised, as has also happened in Rome. Some data indicate an increase in Tesla owners trading in their vehicles.

If the rumours reported by Politico are confirmed, it would be a turnaround that many observers consider beneficial for Tesla. Although it will be a matter of seeing how recoverable the reputational damage to the brand is.

The 11.5 per cent drop in Tesla's sales in China in March compared to the same period in 2024 - or 78,828 units, according to data from the China Passenger Car Association - is a clear sign of increasing competitive pressure in the world's largest market for electric vehicles. The situation appears even more critical when looking at the first quarter as a whole, in which deliveries of vehicles produced in China (including exports to Europe) fell by 21.8 per cent year-on-year, to their lowest level in more than two years.

In an environment dominated by increasingly aggressive local players such as BYD, Nio, Xpeng and Xiaomi, Tesla has struggled to maintain its attractiveness. BYD, in particular, jumped 23.1% year-on-year with over 370,000 monthly deliveries, focusing on an articulated range of hybrid and electric models with autonomous driving capabilities offered at no extra cost. The Shenzen-based group is poised to overtake Tesla as the top global seller of electric vehicles for the first time this year, with a market share of 15.7%, ahead of Tesla's 15.3%.

The response from the company led (not without controversy lately as to how much it really cares) by Musk only came at the end of February with the update of the Model Y, but the absence of any real new models in the past year has prompted many consumers to wait for alternatives such as Xiaomi's YU7 crossover. On the industry front, rivals are also advancing: BYD is implementing a new fast-charging technology and aims to overtake Tesla in global EV sales as early as this year, with a projected market share of 15.7 per cent against an estimated 15.3 per cent for the Texan manufacturer, according to Counterpoint Research.

The commercial slowdown is now joined by a new critical front for Tesla: the legal one. New York City's comptroller (i.e., chief financial officer) Brad Lander has filed a lawsuit against the company, alleging that the tycoon has effectively abandoned his operational role at Tesla, while continuing to officially declare otherwise. At the centre of the dispute would be Musk's role in the Government's Department of Efficiency, the Doge, tasked with cutting government spending, hard and fast.

According to Lander, Musk's increasing visibility in political circles and time spent on parallel activities - from cryptocurrencies such as Dogecoin to the management of the X platform - have compromised Tesla's day-to-day operations. The stock market performance would have been severely affected: in less than three months, the stock lost almost 40 per cent, causing more than $300 million to evaporate from the city's public pension funds. Lander, who is running for mayor of New York, accuses Tesla of providing misleading information to shareholders and asks the city's legal department to take legal action on behalf of the funds.

The issue, however, also has political implications: incumbent mayor Eric Adams - who has also been under the spotlight for months for alleged financial irregularities - has distanced himself from the initiative, accusing Lander of exploiting the case for electoral purposes.

Further complicating the picture for Tesla is the divestment of a European institutional investor. Swedish insurer Folksam announced the sale of its stake in the carmaker, worth around $160 million, citing the company's 'problematic attitude' towards trade union rights in Sweden. The decision follows months of failed attempts at dialogue with Tesla, which has been accused of obstructing workers' demands and failing to meet the minimum standards required by the Scandinavian group's responsible investment policy. 'We have not seen any signs of improvement,' Folksam said, explaining the reason for leaving the Californian manufacturer's capital.