Elon Musk backlash turns into global sales slump for Tesla

Osla If there is anyplace Tesla should be thriving, it’s Norway. Electric vehicles account for more than 90 per cent of new car sales in the Scandinavian country, and buyers here are among the most sophisticated in the world when it comes to understanding the nuances of batteries, charging and range.

So it hardly bodes well for Tesla that its sales in Norway have declined more than 12 per cent so far this year. Sales for the first three months of the year were even worse in Denmark, France, the Netherlands and Sweden.

In fact, Tesla’s sales have been on a steep downward trend around the world: The company said Wednesday that its global sales in the first quarter fell 13% from a year earlier.

Tesla said it delivered nearly 337,000 cars during the quarter. That is down from 387,000 in the first three months of 2024 and fewer than in any period since the second quarter of 2022.

The company’s tepid sales at a time when electric vehicle sales were rising around the world reflected a number of serious problems, not least a consumer backlash against the prominent role that CEO Elon Musk is playing in the Trump administration.

Geir Rognlien Elgvin, an urban planner with the city of Oslo, bought his first Tesla in 2013, months after they were introduced in Norway. He has toured the company’s battery Gigafactory in Nevada. He met Musk when the executive was still mostly known for wanting to address climate change with electric cars and his rocket company, SpaceX.

But as Musk drifted to right-wing politics, Elgvin’s enthusiasm waned. And he grew concerned about the company’s data security policy.

Several months ago, he swapped his Tesla for a battery-powered cargo bike and a shared electric Volkswagen. “I would never drive a Tesla again,” he said. “It’s a question of ethics.”

Last year, Tesla accounted for nearly a quarter of car sales in Norway, far more than any other carmaker. But in the first two months of this year Tesla slipped to third place behind Volkswagen and Toyota. Teslas made up just 9% of new cars sold, less than half of its market share a year earlier.

For Tesla, the decline in the world’s most advanced electric vehicle market is ominous, signaling problems to come elsewhere. “Norway is always a good place to look into the future,” said Will Roberts, who follows electric vehicles at Rho Motion, a research firm.

There are several explanations for Tesla’s sales decline. The company depends on two models, the Model Y SUV and the Model 3 sedan, for almost all its sales. The Cybertruck pickup, Tesla’s newest and most polarizing model, has been plagued by recalls and has not sold as well as Musk predicted it would.

Tesla once set the standard for battery range, software and driver-assistance technology. But traditional carmakers have become more adept at building electric vehicles and have begun to catch up to Tesla in technology. Competitors like Volkswagen, Volvo, BMW — and, outside the United States, BYD, Xpeng and other Chinese manufacturers — offer a diverse selection of luxury sedans, minivans, pickups and compact cars.

“Tesla pretty much all of these years has been alone in Europe and the U.S.,” said Felipe Munoz, global analyst at JATO Dynamics, a research firm. “That’s not the case anymore.”

Some of the sales decline could be due to buyers who are waiting for an upgraded version of the Model Y, analysts said. Deliveries of that version began in March in Norway, which perhaps explains why the company’s sales last month were down only 1% from March 2024.

But Munoz pointed out that sales of the Model 3, which was updated in 2023, have also fallen, though not as much.

In February, registrations in Europe of the older Model Y fell 56%, while registrations of the Model 3 fell 14%, according to JATO. The declines occurred even though overall sales of electric vehicles in Europe jumped 25%.

Musk’s support for right-wing parties in Europe and his role as President Donald Trump’s cost-cutter in chief have not helped Tesla’s image. He has been the focus of protests around the United States and Europe, and his activities have alienated some customers. In most countries, buyers of electric vehicles lean left politically.

“I hate Musk, I hate Trump, I hate this entire company,” said Kao Leu, 75, a resident of New York City’s Harlem neighborhood who was protesting outside a Manhattan Tesla dealership last week.

In Sweden, the country’s largest insurer, Folksam, said Wednesday that it had sold its stake in the U.S. automaker because Tesla’s approach to employee rights violated the company’s investment criteria. Folksam had been invested in Tesla since 2013 and its stake was worth 1.6 billion Swedish krona ($160 million).

Many investors are concerned about the company’s prospects. Tesla’s stock price, down more than 40% from its December high, fell about 2% Wednesday morning.

Mechanics with the union IF Metall have been on strike in Sweden for more than a year, over Tesla’s refusal to sign a collective agreement.