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How much is Elon Musk to blame for Tesla sales slip?

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How much is Elon Musk to blame for Tesla sales slip?

For one Tesla investor, the cause of Tuesday’s disappointing sales figures was clear: the CEO.

“Basically Tesla cannot sell its cars because of Elon’s behavior,” wrote Ross Gerber, the CEO of investment management firm Gerber Kawasaki. “Let’s stop blaming the Houthi rebels or the German environmental terrorists. Or a recession that never happened. Or interest rates. There is only one person responsible for this.”

Writing on X, the Tesla boss’s social media platform, Gerber appeared to lay the blame on Musk’s antics on the same site. Gerber then added during an appearance on the Fox Business channel that the automaker’s board had done nothing to stop Musk’s “toxic” behavior on X, which had “absolutely damaged the (Tesla) brand.”

Musk responded to X in typical style, calling Gerber an “idiot” who “can’t even say he’s an idiot.” Musk also pointed to slowing sales at Chinese rival BYD, saying it was a “tough quarter for everyone.”

Gerber, an outspoken critic of Musk, responded Tuesday to a Tesla sales update that surprised Wall Street and triggered a 5% drop in the company’s shares, exacerbating a more than 30% decline in shares this year.

Tesla said it made about 387,000 customer deliveries in the first quarter of 2024, missing market expectations by about 13%. It was the first drop in deliveries in almost four years and the company cited factory closures caused by shipment delays due to Houthi rebel attacks in the Red Sea and an arson at a Tesla factory in Berlin as mitigating factors. Another factor was the introduction of an updated version of Tesla’s Model 3 car at its Fremont location in the US.

However, the fact that there was a larger percentage decline in deliveries than in factory production indicated a problem with demand.

“There were some unique factors impacting production in the quarter, but we believe demand is slowing,” wrote analysts at investment bank UBS. “Showing a decline in deliveries (year-over-year), especially at a rate greater than the decline in production, will do little to assuage market concerns about growth.”

Musk may have lost the title of richest person in the world, but his global fame, buoyed in part by his divisive online persona, is as strong as ever. Mark Borkowski, a PR consultant and author, said the Tesla boss exemplified the “PT Barnum-esque” approach to modern entrepreneurship.

“Everything in this cult of personality is fragile,” Borkowski said, but added that Musk had previously proven he could “respawn” when he encountered trouble.

That notoriety has prompted some analysts to warn that Musk’s controversial behavior — from endorsing anti-Semitic tweets to reinstating previously banned accounts on

Musk has “distanced himself” from a group of buyers through his actions, according to Gene Munstera managing partner of the American company Deepwater Asset Management.

Munster said there would likely be “a similarly sized group” that was “probably excited by Elon” and some of the things he did. Musk’s behavior would likely be “mildly negative” for U.S. sales, Munster continued, adding that the bigger impact came from higher interest rates and waning consumer excitement about electric vehicles.

Writing on X, Munster said he believed Tesla’s problems would go away because Tesla made the right decisions for the long term. Meanwhile, the Financial Times reported on Wednesday that Tesla was on the brink to explore locations in India for a $2 billion (£1.6 billion) to $3 billion factory it hoped to build.

Daniel Ives, the director of US financial services firm Wedbush Securities, was alarmed by the sales figures, describing them as an “unmitigated disaster” that was difficult to explain away.

Ives didn’t believe Musk’s divisive showmanship was the main reason for the dip. He said the core issues were weakening global demand for electric vehicles and problems in China, Tesla’s second-largest market, where he estimated deliveries fell by at least 3% compared to the previous year.

However, Ives attributed some impact to Musk, warning that the Tesla boss was “throwing gasoline on the fire.”

He argued that 70% of the first quarter ‘train wreck’ was related to China and a global decline in demand for EVs, adding: “Thirty percent of Tesla’s problems in my opinion right now are Musk’s doing.” controlled, with potential customers scared away by his antics..”

Other analysts emphasized that Musk’s X-feed did not affect sales. “I would say the impact of his personality is minimal. We now live in a digitalized period of hyper-short-term thinking, and Elon’s tweet is yesterday’s tweet,” said automotive industry analyst Matthias Schmidt.

Marina Alekseenkova, director at Hypothesis Research, said she believed Tesla remained in a “relatively strong” position and that the poor update was due to one-off issues. “I don’t believe people’s choices depend on what’s on X,” she added.

For once, Musk could be grateful for the lack of attention.

Tesla was contacted for comment.

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