Some people think that Musk, who has several jobs, has not invested enough attention in Tesla, and that his extreme remarks on social platforms have damaged Tesla's brand image.
As the absolute leading company in the global electric vehicle industry,$Tesla (TSLA.US)$Delivery in the first quarter experienced “Waterloo”, enough to make all other tram companies uneasy.
On April 2, the first-quarter automobile production and delivery report released by Tesla showed that Tesla's deliveries fell 8.5% year on year to about 386,800 vehicles, while the month-on-month drop was more than 20%, far lower than analysts' previous expectations of 449,000 vehicles, setting a new record for the biggest drop below expectations.
Wedbush analyst Dan Ives called it “an unexplained disaster,” despite previous poor expectations. This disappointing result also suggests that it may be difficult for Tesla to meet first-quarter earnings expectations that have been lowered by Wall Street.
After the data was released, Tesla's stock price fell 4.9% on the same day.
The reason for Tesla's delivery decline was not just the Red Sea shipping disruptions and the German factory arson case it mentioned. Analysts generally believe that the fundamental problem is weak demand in the global market, especially in the US. Some analysts also believe that Musk, who has several jobs and is undeterred, cannot escape the blame.
Market demand is weak, and car companies cut prices one after another to save themselves
Tom Narayan, an automotive analyst at RBC Capital Market, pointed out that Tesla's growth in the US has slowed significantly, and its main models, the Model Y and 3, are close to market saturation.
Due to the lack of cheap models in the US electric vehicle market, increasing uncertainty about government subsidy policies, and high interest rates dampen consumers' enthusiasm to buy cars, the growth rate of the US electric vehicle market is not outstanding in the global market.
Under sluggish demand, Fisker, a new US electric vehicle force once famous as Tesla, declared bankruptcy. The up-and-coming Rivian lowered production expectations for 2024 and “survived by breaking arms” through layoffs. The new forces in the US are having a very bad time.
However, in China, the world's largest electric vehicle market, BYD's production and sales in January-February both fell short of expectations, and sales in February were close to a drop compared to January.
Competition in the Chinese market is intensifying, and car companies are cutting prices one after another to stimulate market demand. BYD even shouted the slogan “Electricity is cheaper than fuel” and has cut prices on almost all of its models since the beginning of the year.
However, high prices and frequent charging demand still make mainstream consumers have reservations about electric vehicles. Over the past year, as electric vehicle sales growth has slowed, car manufacturers have been forced to attract more consumers by cutting prices.
Tesla deliveries have declined, and Musk can't escape the blame?
The reasons behind Tesla's decline in deliveries can also be analyzed from two different perspectives.
First, there are those who think that Musk is not devoting enough attention to Tesla. Especially in the current period of unprecedented competition in the electric vehicle market, Tesla needs more management and care.
Currently, Musk is also the CEO of social media platform X and Grok, an innovative company in the field of artificial intelligence, which is developing a competitive product of ChatGPT. Additionally, Musk is CEO of SpaceX and Boring Company. Musk, who has held several jobs, has caused dissatisfaction among Tesla investors.
According to Wedbush Securities analyst Dan Ives via email: “Right now, [Tesla] needs Musk to personally take the helm.”
He stressed that Musk needs to push Tesla into a new stage of growth, especially in the current “state of emergency.”
Another question related to Musk is whether his public statements and extreme remarks on X hurt the Tesla brand.
This is the opinion of some Tesla investors. For example, Tesla investor and CEO of Gerber Kawasaki Wealth and Investment Management Company Ross Gerber said on X that Tesla was unable to sell its cars due to Musk's actions.
Admittedly, it seems far-fetched to directly link this view to Tesla's decline in sales, especially in the current situation of increased competition in the market.
However, it must be mentioned that according to market intelligence company Caliber, according to its daily survey of consumer perceptions of major companies, Tesla's public evaluation has now fallen to its lowest level in history.
Caliber CEO Shahar Silbershatz said, “Tesla's evaluation score in the US has been declining for many years, falling to a low of 31% in February 2024.”
When Caliber first began tracking the company, Tesla's highest score reached 70% (November 2021).
Silbershatz also revealed to the media that Musk himself is most likely one of the factors contributing to the decline in the brand's reputation.
Tesla will announce first-quarter results on April 23, and all investors are concerned about the question: “Can 2024 be a new year of growth?”
R.W. Baird & Co. analyst Ben Kallo lowered expectations for Tesla's first quarter results in a report to investors on Tuesday. Baird predicts Tesla's revenue growth of 2% in 2024, compared to the 11% growth rate expected by market consensus.
Editor/Somer