Elon Musk is learning that his haters hate his Tesla cars too
Eric Reguly
[url]https://www.theglobeandmail.com/business/commentary/article-tesla-shares-sales-elon-musk/[/url]
?Elon Musk, the broligarch who became Donald Trump’s election financier and chainsaw-wielding government slasher, and is an apparent fan of certain Second World War-era German arm gestures, ranks high on the Canadian hate list. A petition to revoke his Canadian citizenship of the man who has referred to Justin Trudeau as “Canada’s governor” and has said “Canada is not a real country” – Mr. Trump has said the same things – so far has earned hundreds of thousands of signatures. Sales of Mr. Musk’s Tesla electric cars are plummeting in Canada and Liberal leadership candidate Chrystia Freeland has proposed hitting Tesla imports with 100-per-cent tariffs.
If that were not enough schadenfreude to brighten your weekend, Canadians are not alone in viewing Mr. Musk as a disease that needs to be eradicated. There is no carmaker as closely identified with its owner and boss as Tesla; if you can’t punch Mr. Musk in the face, you can certainly punch the shares. They are in near free fall, along with Tesla sales, in many of the company’s main markets.
Since December, when Tesla TSLA-Q -0.30%decrease peaked at US$488, its shares have lost 45 per cent of their value. Tesla is no longer a member of the trillion-dollar club, even if the shares are still up by half over the past year. Few analysts think they are oversold. J.P. Morgan put a US$135 target on Tesla in January, about half the current price.
The fall has been so precipitous that the political backlash against Mr. Musk and Mr. Trump cannot explain the entire sell-off. Take China. It’s unlikely that the Musk-hate factor ranks high among Chinese car buyers – Mr. Musk is not involved in China’s politics – yet Tesla is in the tank in what is the world’s largest car market. China’s Passenger Car Association reported that Tesla built and sold 30,688 vehicles in February, a drop of 49 per cent over the same month a year earlier.
That tells you that Chinese automakers are launching more luxurious EVs alarmingly fast (for Tesla), offering as good, or better, products at a lower price. China’s BYD, which was backed by Warren Buffett, is now the global EV leader, and other Chinese carmakers are coming on strong.
The Chinese onslaught was bound to happen. It just seems to be happening a bit faster than expected, as many buyers view Teslas not only as politically incorrect, but also overpriced and stale. Indeed, the Tesla fleet needs a refresh: The cars are losing their cool factor.
The political backlash also seems to be intensifying as Mr. Musk’s Department of Government Efficiency defenestrates bureaucrats in the thousands and guts entire agencies. Among the cuts,the U.S. Agency for International Development, which was the world’s biggest aid donor, was dismantled.
Over all, Tesla’s European sales were down by 45 per cent, year on year, and the company’s share of the car market dropped to 1 per cent from 1.8 per cent.
The sales collapse has been especially savage in Germany, where Mr. Musk endorsed the far-right, anti-immigrant, anti-climate, pro-Russia Alternative for Germany (AfD) party. (It placed second in last month’s election and will be the main opposition party in the new parliament.) Purchases of Teslas in the country fell 76 per cent, according to the German Association of the Automotive Industry. In France, sales were down 26 per cent and a dozen Teslas were torched in Toulouse. In Norway, the European market with the greatest EV penetration, they fell by nearly half.
Europe could turn into a wasteland for Tesla if anti-Musk sentiment intensifies, which is possible. Europeans are generally more pro-Ukraine than Americans, and they are coming to its rescue now that Mr. Trump has suspended weapons deliveries to the country and ended intelligence sharing with its military. There is ample speculation that Mr. Musk will yank his Starlink satellite internet from Ukraine, which has played a crucial role in the country’s defence; its drones rely on the service to navigate and communicate with ground operators.
If the rift between Europe and the United States widens, there is some chance that the European Union will lift, or reduce, its tariffs on Chinese-built EVs. The EU approved tariffs of up to 35 per cent last year, even though some of Europe’s top carmakers, including Volkswagen, BMW and Mercedes, which sell about a third of their products in China, opposed them. If the tariffs were to drop, inexpensive though high-quality Chinese brands would flood into the continent. Tesla sales would fall again.
Sales in the United States, where virtually no Chinese cars exist, and where the MAGA crowd may offset some lost sales caused by the buyers’ strike among haters of Mr. Musk and Mr. Trump, may hold up better, though they have fallen by double digits in California, the biggest American EV market.
But the United States alone will not save Tesla, now a global company. Tesla will have to slug it out with Porsche, BMW, Mercedes and the Chinese carmakers as they launch competitive EVs from the bottom to the top ends of the market. Their goal of toppling Tesla just got easier, thanks to Mr. Musk’s fanatic devotion to a reckless, domineering narcissist of a president.
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Eric Reguly
[url]https://www.theglobeandmail.com/business/commentary/article-tesla-shares-sales-elon-musk/[/url]
?Elon Musk, the broligarch who became Donald Trump’s election financier and chainsaw-wielding government slasher, and is an apparent fan of certain Second World War-era German arm gestures, ranks high on the Canadian hate list. A petition to revoke his Canadian citizenship of the man who has referred to Justin Trudeau as “Canada’s governor” and has said “Canada is not a real country” – Mr. Trump has said the same things – so far has earned hundreds of thousands of signatures. Sales of Mr. Musk’s Tesla electric cars are plummeting in Canada and Liberal leadership candidate Chrystia Freeland has proposed hitting Tesla imports with 100-per-cent tariffs.
If that were not enough schadenfreude to brighten your weekend, Canadians are not alone in viewing Mr. Musk as a disease that needs to be eradicated. There is no carmaker as closely identified with its owner and boss as Tesla; if you can’t punch Mr. Musk in the face, you can certainly punch the shares. They are in near free fall, along with Tesla sales, in many of the company’s main markets.
Since December, when Tesla TSLA-Q -0.30%decrease peaked at US$488, its shares have lost 45 per cent of their value. Tesla is no longer a member of the trillion-dollar club, even if the shares are still up by half over the past year. Few analysts think they are oversold. J.P. Morgan put a US$135 target on Tesla in January, about half the current price.
The fall has been so precipitous that the political backlash against Mr. Musk and Mr. Trump cannot explain the entire sell-off. Take China. It’s unlikely that the Musk-hate factor ranks high among Chinese car buyers – Mr. Musk is not involved in China’s politics – yet Tesla is in the tank in what is the world’s largest car market. China’s Passenger Car Association reported that Tesla built and sold 30,688 vehicles in February, a drop of 49 per cent over the same month a year earlier.
That tells you that Chinese automakers are launching more luxurious EVs alarmingly fast (for Tesla), offering as good, or better, products at a lower price. China’s BYD, which was backed by Warren Buffett, is now the global EV leader, and other Chinese carmakers are coming on strong.
The Chinese onslaught was bound to happen. It just seems to be happening a bit faster than expected, as many buyers view Teslas not only as politically incorrect, but also overpriced and stale. Indeed, the Tesla fleet needs a refresh: The cars are losing their cool factor.
The political backlash also seems to be intensifying as Mr. Musk’s Department of Government Efficiency defenestrates bureaucrats in the thousands and guts entire agencies. Among the cuts,the U.S. Agency for International Development, which was the world’s biggest aid donor, was dismantled.
Over all, Tesla’s European sales were down by 45 per cent, year on year, and the company’s share of the car market dropped to 1 per cent from 1.8 per cent.
The sales collapse has been especially savage in Germany, where Mr. Musk endorsed the far-right, anti-immigrant, anti-climate, pro-Russia Alternative for Germany (AfD) party. (It placed second in last month’s election and will be the main opposition party in the new parliament.) Purchases of Teslas in the country fell 76 per cent, according to the German Association of the Automotive Industry. In France, sales were down 26 per cent and a dozen Teslas were torched in Toulouse. In Norway, the European market with the greatest EV penetration, they fell by nearly half.
Europe could turn into a wasteland for Tesla if anti-Musk sentiment intensifies, which is possible. Europeans are generally more pro-Ukraine than Americans, and they are coming to its rescue now that Mr. Trump has suspended weapons deliveries to the country and ended intelligence sharing with its military. There is ample speculation that Mr. Musk will yank his Starlink satellite internet from Ukraine, which has played a crucial role in the country’s defence; its drones rely on the service to navigate and communicate with ground operators.
If the rift between Europe and the United States widens, there is some chance that the European Union will lift, or reduce, its tariffs on Chinese-built EVs. The EU approved tariffs of up to 35 per cent last year, even though some of Europe’s top carmakers, including Volkswagen, BMW and Mercedes, which sell about a third of their products in China, opposed them. If the tariffs were to drop, inexpensive though high-quality Chinese brands would flood into the continent. Tesla sales would fall again.
Sales in the United States, where virtually no Chinese cars exist, and where the MAGA crowd may offset some lost sales caused by the buyers’ strike among haters of Mr. Musk and Mr. Trump, may hold up better, though they have fallen by double digits in California, the biggest American EV market.
But the United States alone will not save Tesla, now a global company. Tesla will have to slug it out with Porsche, BMW, Mercedes and the Chinese carmakers as they launch competitive EVs from the bottom to the top ends of the market. Their goal of toppling Tesla just got easier, thanks to Mr. Musk’s fanatic devotion to a reckless, domineering narcissist of a president.
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