Declining sales figures suggest that Tesla’s glory years are already behind it. But there is still a way forward for Elon Musk.
Tesla faces major challenges in the future. Getty Images/Scott Olson
The latest figures from the Investor Report from Tesla are a bit confusing. On the one hand, fewer cars were sold than in the last quarter. But Tesla is not alone in this. BYD also sold slightly fewer cars in the first quarter of 2024. Tesla also sold the most electric cars of any manufacturer worldwide, pushing BYD back into second place. But there is one thing that seems strange.
Tesla produced around 50,000 more cars than the company sold.
At the same time, Tesla points out in the report that the numbers are declining because they suffered from the blockade in the Red Sea and the failure of the Gigafactory in Berlin. Something can’t be right, because without the failures a total of up to 100,000 vehicles would have been dumped.
But even without the discrepancies, Tesla seems to have slowly reached the end of the very steep growth curve. The one-car policy (almost 90 percent of all sales relate to the Tesla 3/Y) could cause problems in the future. The gains on the stock market from last year have all disappeared because investors are slowly becoming skeptical.
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The competition puts pressure on you
In addition, Tesla’s competition doesn’t sleep either. In the USA they may still offer the best electric cars, but in the EU and China they are following suit. There are a number of competitive offers, especially in the Tesla 3 segment. German manufacturers are also slowly gaining momentum, especially VW. After the difficult start of the ID3, they learned what needs to be done better. The ID2, which is expected in 2026, is also expected to overtake the Tesla 3 in terms of price. In addition, there are the electric cars from Renault, which have announced three cars – the Twingo, R5 and R4 – that will cause a sensation on the market. BYD will also continue to put pressure on Tesla.
Tesla’s problem is not that it has fallen behind technologically. If you look at the range a Tesla can achieve from battery power, Tesla is still ahead. The competition can’t keep up with the software of the infotainment system either. Only the systems from Mercedes and BMW offer something similar. The company is also still doing well financially. With a cash reserve of around 20 billion euros, we can repay current loans and commission additional gigafactories.
But Tesla’s Achilles heel is and remains its concentration on the Tesla 3/Y. If sales collapse here, Elon Musk faces a problem. Therefore, the general expectation was that Tesla would offer a new model in the coming years at a price between 25,000 and 30,000 euros. Because all other manufacturers have a significantly broader range of electric cars. But the oft-mentioned Tesla 2 will not be coming onto the market any time soon. Instead, Musk would like to present his first robotaxi in August.
The robotaxi should fix it
Even if the stock market responded to the announcement with a slight price jump, the idea of a robotaxis is unlikely to make life any easier for Tesla. In addition to the question of whether the car can be fully autonomous, i.e. without a driver, and whether it is safe, there is also the point that there is no legal basis for the mass approval of robotaxis anywhere in the world. They are operating in some cities and certain districts, but there are still no laws for general approval.
But Elon Musk is one of those people who thinks less about what is allowed today and more about what will be in demand in the future. Musk’s investments in Paypal in the 90s and his other investments in SpaceX and Tesla have shown that he can do things successfully because he is able to predict future trends longer than the competition. There is no question that robotaxi will come. However, it is questionable whether Musk is five to ten years too early.
So Tesla is making another bet on the future, but the danger is that Musk will neglect the present too much. Even if the demand for electric cars will increase worldwide and there is enough space on the market, the Tesla 3 alone will not be able to secure the company. Therefore, it would not be surprising if Tesla slipped into a phase of stagnation in the next few years.
Don Dahlmann has been a journalist for over 25 years and has been in the automotive industry for over ten years. Every Monday you can read his “Torque” column here, which takes a critical look at the mobility industry.
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