Tesla Between Musk-misery and wrong model policy

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Tesla's new car sales are experiencing a steep decline. There are now sound technical and portfolio reasons to prefer another brand when buying an electric car.

There were times when they celebrated him like a messiah: When a shy Tesla CEO Elon Musk presented the Model X in Los Angeles in 2012, the fans reacted like at a rock concert, and the cheers knew hardly any bounds.

Thirteen years later, the 53-year-old has become more rhetorically adept and has matured into the perfect show star, but his fans have changed. Because when the now richest man in the world stands on stage today, he embodies the grand, sometimes very questionable pose; but in the audience are no longer the electrified fan-boys of the mobility revolution, rather the die-hard Trump voters, and the focus is no longer on cars, electromobility, or the climate, but on the big picture of politics in America and the rest of the world.

Already with the Twitter acquisition and his handling of opinion and truth, Musk has alienated many Tesla fans. And with his engagement first for Trump and then for the European right-wing, up to Alice Weidel and her AfD, he alienates even more customers. As a result, the internet is full of protest reactions, and online shops are overflowing with stickers like "I bought this car before Elon went crazy," with which drivers distance themselves from the company chief.

Tesla outlook

Musk's statements are scaring off more and more potential buyers

"Elon Musk has long since become a problem for the brand," judges e-mobility expert Stefan Möller from the car rental company Nextmove, and he anticipates a sales decline, especially in Germany. Especially as the first consequences are already visible: Corporate fleets like the drugstore chain Rossmann or the energy provider Badenova are publicly parting with their Teslas.

Steep decline in the registration statistics

The current figures speak volumes. In the full year of 2024, Tesla sales in Germany plummeted by 41 percent. The free fall continued in January with a decrease of 59.5 percent. The market share is now only 0.6 percent. The brand is far from the Corona times when the manufacturer was able to deliver and the market share seemed to be marching towards 3 percent.

Tesla also experienced a setback across Europe. According to data from the consulting firm Jato, the Dacia Sandero has replaced the Tesla Model Y as Europe's best-selling car. New registrations of the Model Y fell by 17 percent—Tesla sold a total of 35,000 fewer units in Europe than a year earlier. This was a decline of 10 percent in an overall slightly growing market.

All this comes at a time when things at Tesla are already anything but smooth: The latest quarterly results have disappointed analysts. The highly polarizing, initially extremely coveted Cybertruck with its angular stainless steel body is now stagnant and can only be sold with large discounts. Meanwhile, the competition has become stronger than ever. Currently, it's mainly the Chinese: BYD is hot on Tesla's heels in global electric registrations, and hardly a quarter goes by without a new challenger like the Xpeng G6 or the Hyptec HT entering the race against Model S, X, 3, or Y, scoring more points in one discipline or another than the original.

And the Germans aren't even fully participating yet. For a long time, in Stuttgart, Wolfsburg, or Munich, they stood dumbfounded and paralyzed in shock instead of taking on Elon Musk. But that is also changing now: The VW Group has provided a solid response to the affordable variants of the Model 3 with the ID 7, and with the duo of Audi Q6 and Porsche Macan on the new PPE platform, the Lower Saxons are skimming the cream in the Model Y segment.

More and more competitors are launching

And when Mercedes-Benz launches the new CLA as the first e-model of the next generation at the end of the year and BMW starts with the "Neue Klasse," it will become a bit more uncomfortable for Elon Musk. With new platforms, new battery technology, and for the first time with their own innovative software architecture, Stuttgart and Munich aim to beat the former world champion at his own game.

Tesla currently has much bigger problems than the trials and tribulations of its boss, also judges Jan Burgard from the strategy consultancy Berylls by Alix Partners. Although the expert admits that a politically active CEO polarizes and thus also scares off potential customers, and especially in Germany, this could lead to boycott actions. "But experience shows that such things are rarely long-lasting." And when large fleets like Sixt decommission their Teslas, it's not just about soft factors like image, but also very real problems with parts availability and service.

Tesla is now at a point where more intensive care for the company is needed than Musk can provide with his many interests and engagements. Just as he has installed Gwynne Shotwell as the actual decision-maker at SpaceX, someone would also need to take charge of the day-to-day business and, above all, the strategy at Tesla: It once aimed for 20 million cars a year, with autonomous driving as the all-important factor.

Autonomous driving is a bet on the future

This is because autonomous cars are supposed to bring in money for the Tesla owner when they don't need their car and make it available to a ride service. "However, if you remove autonomous driving because it doesn't seem to be progressing well, a Tesla is simply an electric vehicle that has to compete," says Burgard. "And today, in many vehicle functions, the competition is much further ahead, including in autonomous driving."

The competition changes everything for Tesla: "Without competition, Musk could still compete with an aging portfolio. But suddenly, in many comparisons, Teslas now literally look old." And the facelift for the Model Y can hardly be seen as a breakthrough: Instead, it reminds Burgard more of a fresh iPhone with old technology and a few new gimmicks. "Only, unlike Apple, Tesla does not have a 20 percent global market share."

A budget model is still missing

If Tesla still wants to achieve the target of 20 million cars at some point, the corresponding offering must come, and that can only lead to an affordable model. Since the competition doesn't have much to offer there either, a car under 25,000 (26.205 USD) or better yet under 20,000 euros (20.964 USD)could still carry the brand for a while, Burgard is convinced. Especially if Tesla also gets its other issues under control, bringing its digital services up to date, improving its aftersales business and parts availability, and reorienting itself in autonomous driving. "And if the CEO gets his public image back under control."

There's a lot to do, summarizes Burgard, fearing that a full-time CEO is needed for it. "Even Elon Musk can't do that on the side." Previously, the Tesla CEO worked so long and even slept in the factory until the problems were solved. "But that's no longer feasible today."