Tesla sales drop 13% in first quarter as Elon Musk backlash, aging models hurt demand

By BERNARD CONDON, Associated Press Business Writer

NEW YORK (AP) — Tesla sales declined in the first three months of the year, another sign that Elon Musk’s once high-flying electric car company is struggling to attract buyers.

The drop of 13% is likely due to combination of factors, including its aging lineup, competition from rivals and a backlash from Musk’s embrace of right wing politics. It also is a warning that the company’s first-quarter earnings report later this month could disappoint investors.

Tesla reported deliveries of 336,681 globally in the January to March quarter. The figure was down from sales of 387,000 in the same period a year ago. The decline came despite deep discounts, zero financing and other incentives.

Analysts polled by FactSet expected much higher deliveries of 408,000.

Tesla’s stock has plunged by roughly half since hitting a mid-December record as expectations of a lighter regulatory touch and big profits with Donald Trump as president were replaced by fear that the boycott of Musk’s cars and other problems could hit the company hard.

Analysts are still not sure exactly how much the fall in sales is due to the protests or other factors. Electric car sales have been sluggish in general, and Tesla in particular is suffering as car buyers hold off from buying its bestselling Model Y because of plans for an updated version later this year.

The Austin, Texas electric vehicle maker has also lost market share to rivals in recent months as their offerings improve, including those of BYD. The Chinese EV giant unveiled in March a technology that allows it cars to charge up in just a few minutes.

Shares of Tesla slipped more than 4% before the market open on Wednesday.