Musk’s exit from politics fails to stop Tesla’s decline in Europe

Tesla’s electric car sales in Europe have continued their drop for a fifth straight month, even after the company introduced its Y model and Elon Musk quit his political activities in the US.

According to the European Automobile Manufacturers’ Association, Tesla delivered 13,863 battery-only cars in the UK and wider Europe in May. FT reported it as a drop of 28% compared with May last year. Early this year, Tesla’s earnings and unit sales began slipping, blamed on an older lineup and Musk’s high-profile political comments.

In response, Musk agreed to scale back his public interventions and return his full attention to the EV maker’s day-to-day running.

While Tesla’s figures have dipped, other brands have picked up pace. Overall registrations of new battery-electric vehicles in Europe rose 27.2% in May from a year earlier. Volkswagen Group brands saw a 3.4% lift, and BMW’s pure-electric registrations increased by 5.6% over the same period.

Barclays analysts put Tesla’s global deliveries for the second quarter at about 375,000 vehicles, down 16% year-on-year. That falls short of the roughly 400,000 units most investors were expecting and highlights ongoing challenges for the carmaker.

In France, regulators from the consumer affairs and fraud office have told the EV maker to stop making what they call “deceptive” claims about how autonomous its vehicles are.

If the company does not comply, it could face fines running into the thousands of euros. At the same time, a small group of Tesla leaseholders in France have filed lawsuits seeking to end their contracts, arguing that Musk’s political stance has turned their cars into “far-right totems.”

Tesla’s share price has remained resilient despite weak European sales

Following the launch of its driverless taxi service in Austin on Sunday, TSLA stock jumped nearly 6%. Musk has said these robotaxis, powered by advanced artificial intelligence, are the future of the company and could push Tesla’s value as high as $5 trillion, about five times today’s market capitalization.

The rollout of robotaxis was modest at first. Only around ten vehicles are operating, confined to a few areas, and each still needs a person behind the wheel for safety. Riders pay a flat fare of $4.20, as Tesla seeks to begin earning from autonomous rides even as sales of new cars slow.

Still, not everyone shares Musk’s optimism.

Barclays’ Dan Levy warns that moving to a large-scale fleet of self-driving cars will take much longer than some hope. “We believe the much better question ahead is on the path of scaling, which we believe will be long,” he said, “and we caution against over-optimism,”

Chinese manufacturer BYD recently outsold the US EV giant in pure electric models in Europe for the first time.

Data from JATO Dynamics show that in April, BYD’s European deliveries jumped 359% year-on-year, despite higher tariffs on Chinese imports imposed by the EU last October. Over the same month, Tesla’s volumes fell by 49%. These figures cover 28 European countries and underscore how quickly the EV market is evolving.

KEY Difference Wire: the secret tool crypto projects use to get guaranteed media coverage