Tesla is expected to post weak quarterly sales this week after a brutal start to 2024
Elon Musk is turning off a lot of potential Tesla $TSLA buyers in the U.S., according to a survey from market intelligence firm Caliber. Because of that, the overall pool of potential Tesla buyers is shrinking. Tesla may have posted strong sales growth last year, but the Austin, Texas-based automaker is expected to post a rather weak quarterly sales report sometime this week.
Caliber’s “considering score” for Tesla fell to just 31 percent in February 2024. That’s a massive drop from the 70 percent high in November of 2021 when it started tracking consumer interest in the automaker. From Reuters:
Tesla’s consideration score fell 8 percentage points from January alone even as Caliber’s scores for Mercedes, BMW and Audi, which produce gas as well as EV models, inched up during that same period, reaching 44-47%.
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Musk in the past has blamed high-interest rates for curbing consumer demand for big ticket items like cars.
Caliber cited strong associations between Tesla’s reputation and that of Musk for the scores.
“It’s very likely that Musk himself is contributing to the reputational downfall,” Caliber CEO Shahar Silbershatz told Reuters, saying his company’s survey shows 83% of Americans connect Musk with Tesla.
Reuters spoke to five marketing, polling and car experts who said controversies surrounding Musk’s increasingly right-wing politics and public statements are weighing on Tesla’s brand and demand.
“It is hard enough to win sales without getting into politics,” said Tim Calkins, a marketing professor at Northwestern University’s Kellogg $K School of Management.
It isn’t just Elon Musk freaking people out, though. Economic fears, a lack of affordable new models and stronger competition have been cited by Wall Street analysts as issues facing Tesla.
Overall electric vehicle sales in the U.S. are forecast to increase 15% in the first quarter of this year, according to estimates by researcher Cox Automotive. Tesla sales are projected to increase by 3%.
“The EV slowdown is shaping up to be a Tesla slowdown,” Cox analyst Stephanie Valdez Streaty said during a conference call Thursday.
New car registrations for Teslas in California- their biggest market in the U.S. - posted their first drop in over three years in the fourth quarter of 2023 even as EV sales rose overall.
At least five analysts cut Tesla’s target price last month, saying the automaker could post disappointing first-quarter delivery results. Tesla shares are down nearly 30% year to date.
Musk’s outsized personality benefited Tesla as he promoted tackling climate change by reimagining cars as stylish, electric computers on wheels that could beat gasoline guzzlers in looks, performance and handling.
Over the past few years, Musk has welcomed controversy with comments and actions on his social media site, X $TWTR (still Twitter in my heart). Lately, he has been very big on anti-semitism and transphobia.
When asked by an investor during a January 2023 conference call if his political comments were hurting Tesla’s brand and sales, Musk said he was “reasonably popular,” referring to his then 127 million followers on X, formerly known as Twitter.
“Whether you hate me, like me or are indifferent, do you want the best car, or do you not want the best car?” Musk said at another event in November.
Brand valuation consultancy Brand Finance found Tesla’s reputation fell in 2023 in the United States, the Netherlands, France, United Kingdom, and Australia. Tesla’s reputation did not suffer in China, where access to news on the company and its CEO may have been limited, and Germany.
In the U.S., a survey by consumer analytics firm CivicScience shown exclusively to Reuters found that 42% of respondents had an unfavorable view of Musk in February, up from 34% in April 2022 when Musk disclosed his stake in Twitter.
“A modest but growing number of EV shoppers are increasingly put off by Elon Musk’s behavior and politics and are now finding viable alternatives to Tesla in the marketplace,” Ed Kim, president of California-based consultancy AutoPacific said.
A version of this article originally appeared on Jalopnik’s The Morning Shift.
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