Latest news with #BYDs
Business Times
04-07-2025
- Automotive
- Business Times
Tesla has a problem – and it's not just the Elon Musk backlash
[AUSTIN] Tesla is in a sales slump, with deliveries of its electric vehicles on track to decline for the second full year in a row. The polarising politics of chief executive officer Elon Musk have alienated car buyers in major markets. Customers have yet to flock back to showrooms after Musk stepped away from his activities in Washington and ended up in a very public feud with President Donald Trump. But Tesla's problems run deeper than the consumer backlash seen over the past few months. While the automaker has given its most popular model – the Model Y – a facelift, it is lacking a new, more affordable car to revitalise its dated lineup. That has left the company vulnerable to competitors, particularly those hailing from China. Tesla's US$1 trillion market capitalisation suggests investors remain buoyant. The value they ascribe to the company is increasingly rooted in Musk's vision of a future filled with autonomous vehicles and humanoid robots, rather than the human-driven EVs in the here and now. What's happened to Tesla's sales? Deliveries hit an almost three-year low in the first quarter. The drop was due in part to the process of redesigning the Model Y, as Tesla paused output at each of its assembly plants to retool production lines for the revamped SUV. The company was counting on the spruced up Model Y to boost sales in the second quarter. Overall deliveries instead slid 13 per cent from a year earlier, undermining Musk's claim in mid-May that sales had 'already turned around.' BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up By Musk's own admission, Europe is the company's weakest major market. The number of new Teslas registered across the region plunged 37 per cent during the first five months of the year, according to the European Automobile Manufacturers' Association – even as the broader market expanded. Industrywide battery-electric vehicle sales in Europe were up 28 per cent. Tesla's struggles have created an opening for rival BYD. The Chinese automaker sold more fully electric cars in Europe than Tesla for the first time ever in April, in what one analyst called a watershed moment. Some are predicting BYD will pull ahead of Tesla globally for the full year – and that's without BYDs even being available in Tesla's home market, the US. Cox Automotive estimates Tesla's US vehicle sales fell 15 per cent in the first half. Tesla is still the top-selling EV brand in the US, but its share of electric-car sales has shrunk from more than 75 per cent in 2022 to under 50 per cent as of 2024, according to Cox-owned Kelley Blue Book. In China, the world's biggest EV market, Tesla's shipments from its Shanghai plant – destined both for domestic customers and for export – declined for eight consecutive months year-on-year before ticking up in June, according to the China Passenger Car Association. Why is Tesla losing ground in the EV market? Musk has stuck to a less-is-more approach to Tesla's lineup. The company only sells five vehicles – the Model S (which debuted in 2012), Model X (2015), Model 3 (2017), Model Y (2020) and the Cybertruck (2023) – and not all of these are available globally. BYD, by contrast, offers substantially more models and most of them are cheaper than Tesla's best-sellers, the Model Y and Model 3 sedan. BYD also announced in March that it had developed an EV battery system that can charge within five minutes, which could make the brand even more competitive. New entrants are threatening Tesla's standing, particularly in what was an already-crowded and competitive Chinese EV market. The most noteworthy newcomer has been Xiaomi, the smartphone maker that's branched into car manufacturing. The company secured almost 300,000 pre-orders for its second electric vehicle, the YU7, within the first hour of making the SUV available. At around US$35,000, it's cheaper than Tesla's Model Y. A sub-US$30,000 car has long been seen as key to further sales growth for Tesla. But the affordable vehicle Musk has been promising since his first 'Master Plan' in 2006 has yet to materialise. In recent years, the company instead launched the Cybertruck, an expensive pickup that's fallen well short of its CEO's volume expectations. Tesla told investors in April that new vehicles, including more affordable models, were on track to go into production during the first half of this year. But there's still no sign of any cheaper new cars, leading analysts to speculate they may have been delayed. It's unclear whether Tesla will make meaningful adjustments to its lineup anytime soon. In the near term, it could just introduce stripped-down, lower-priced versions of existing models and look increasingly out of step with competitors' fresher designs. How much are politics at play in Tesla's slump? The starkest sign that Musk's close links to Trump and the Republican Party were beginning to drag on Tesla came from California, the Democratic stronghold where the EV maker's registrations fell in all four quarters last year. The backlash intensified after the US election in November, as Musk got to work dismantling federal agencies in his role as the government's efficiency czar and cheered on far-right politicians in Europe. Musk's politicking sparked the 'Tesla Takedown' movement, whose organisers arranged protests at showrooms globally and called for a boycott of the company's products and its shares. The EV maker has also dealt with incidents of vandalism and arson. Musk has acknowledged 'blowback' from his involvement in the Trump administration, though he also insisted he's opened paths to consumers on the political right that could counter the sales he was costing Tesla on the left. That has yet to show up in the company's quarterly figures, and now Musk's ties to Trump have come under strain due to his scorching criticism of the president's tax bill. With the bromance days in the rearview, Republican lawmakers did not spare Tesla when putting the US$7,500 tax credit for EV purchases on the chopping block. As the Trump administration looks to ease fuel-economy and tailpipe-emission standards, Tesla's billions of US dollars in revenue from selling regulatory credits that help other automakers comply with the rules could come under pressure. What is Tesla doing to try to recover? Musk has assumed oversight of sales in Europe and the US after the departure of longtime confidant Omead Afshar, according to people familiar with the matter. Afshar's exit followed a string of senior-level departures this year, including Milan Kovac, the engineering lead for Tesla's Optimus robot programme, and David Lau, who ran software for over a decade. Musk's deeper involvement comes at a time when analysts estimate Tesla will fall short of the 1.79 million cars it sold last year. That would stand in contrast with a growing global market, with BloombergNEF forecasting sales of battery-electric vehicles will climb 19 per cent in 2025. As Tesla's EV momentum slows, Musk has been hyping up what he sees as the company's true calling: self-driving cars and humanoid robots. Both endeavours are some way off from starting to 'move the financial needle,' as Musk put it during an earnings call in April. Tesla's ambition is to have a driverless ride-hailing network that initially uses its consumer vehicle models before incorporating a purpose-built Cybercab, which will have no steering wheel or pedals. After roughly a decade of predicting Teslas should soon be able to drive autonomously, the company launched its long-awaited robotaxi service in late June. It was a modest debut, with Tesla only offering rides to a small contingent of fans in a confined area of Austin. Footage of several journeys drew scrutiny from federal safety regulators after the vehicles appeared to violate traffic laws. The challenge for Tesla now is to scale these operations to prove that its future is indeed in autonomy rather than automaking. 'The central question is, do you believe cars will be autonomous and electric in the future? If the answer is yes, Tesla will pull through and will be in a really good place,' said Gene Munster, managing partner of Deepwater Asset Management. BLOOMBERG
Auto Blog
02-07-2025
- Automotive
- Auto Blog
Honda Delays Hydrogen Fuel Cell Plant Plans Amid Market Shifts
Honda has decided to scale back and delay its plans for a new hydrogen fuel cell production plant in Japan, citing shifts in the global hydrogen market. Originally intended to start operations by 2028 with an output of 30,000 units a year, the facility in Moka City will now launch later and with a reduced capacity. Honda will also forgo a substantial government subsidy tied to those targets. This isn't just a case of supply chain tweaks or cautious planning. It marks a noticeable cooling of Honda's once-enthusiastic hydrogen ambitions — and reflects wider headwinds facing the fuel cell sector as a whole. Source: Copyright 2015 Sebastian Blanco / AOL Global Hype Meets Global Headwinds Honda was among the earliest champions of hydrogen tech, unveiling its first fuel cell concept more than three decades ago and releasing the Clarity Fuel Cell sedan in the mid-2010s. But despite years of development, mass adoption of hydrogen-powered vehicles has remained elusive. Infrastructure has lagged. Costs remain high. And the dominance of battery-electric vehicles — from Teslas to BYDs — has made fuel cells look increasingly niche. Even Toyota, another vocal hydrogen proponent, is putting greater emphasis on hybrid and BEV models, while Hyundai's hydrogen truck plans have slowed. Against that backdrop, Honda's decision to delay its fuel cell rollout — and step back from Japan's METI subsidy scheme — sends a clear signal: the hydrogen timeline is slipping. Source: Honda No More Fast-Track, No More Subsidy Honda had been preparing the Moka City site for production of its next-generation fuel cell module, independently developed and planned for use in four domains: fuel cell vehicles, commercial trucks, stationary power generators, and construction machinery. The facility was supposed to be a flagship — a sign that Honda's hydrogen plans were maturing. But the revised production timeline now pushes it beyond the 2028 subsidy deadline and below the 20,000-unit annual output threshold required to qualify. Rather than adjust the project to fit, Honda has opted out of the programme entirely. Still Talking Big — But Moving Cautiously In its official statement, Honda reiterated its long-term goal of achieving carbon neutrality across all products and corporate activities by 2050. Hydrogen, it says, remains a part of that strategy. But the language has shifted from bold commitments to tempered caution. Honda still sees hydrogen as one of its 'core businesses,' but its actions suggest a more pragmatic approach — keeping the tech alive without overcommitting capital in an uncertain market. In short: the fuel cell dream isn't dead. But it's not exactly on a fast charge either.
Yahoo
10-06-2025
- Automotive
- Yahoo
Startline survey reveals Chinese car brands gain traction among UK motorists
More than seven out of ten UK motorists are open to purchasing vehicles from emerging Chinese car manufacturers, according to Startline's June Used Car Tracker. In the survey, 72% of respondents expressed willingness to consider Chinese cars. BYD emerged as the most recognised brand among potential buyers, with 28% awareness, followed by Maxus at 19% and Chery at 14%. Other brands such as Aiways, Denza, and Jaecoo each garnered 11% while Omoda and Xpeng stood at 10%. Nio, Skywell, and GWM Ora achieved 9%, with Leapmotor, Lynk & Co, HiPhi, and Zeekr trailing. Startline Motor Finance CEO Paul Burgess said: 'Chinese manufacturers are making a concerted assault on the UK market – almost 12,000 BYDs were sold here in the first four months of the year – and our research shows that consumers are receptive to the idea of buying a car from them.' Burgess further explained that differentiation is a challenge for these new entrants. Those investing in marketing and dealer networks are seeing increased consumer awareness, with BYD as a prime example. Despite this, 18% of respondents prefer established brands, 11% have quality concerns, and 7% wish to support British manufacturers. Additional concerns include parts availability and security, each noted by 4% of respondents, and dealer support, mentioned by 2%. Burgess stated that while a small group of car buyers exhibits some hesitation, significant concerns typically associated with the quality and support offered by new Chinese automakers are notably minimal. Compiled by APD Global Research, the Startline Used Car Tracker surveyed 301 consumers and 66 dealers, providing insights into consumer perceptions and market trends. Earlier this year, Startline Motor Finance secured a five-year credit facility worth £475m ($583m) from the US bank JP Morgan. Startline offers near-prime financing solutions to approximately half of the UK's top 50 franchised car dealers and 70% of the leading 50 independent automotive retailers, based on revenue. "Startline survey reveals Chinese car brands gain traction among UK motorists" was originally created and published by Motor Finance Online, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
The Advertiser
04-06-2025
- Automotive
- The Advertiser
What's driving the dramatic drop in Tesla sales?
Sales of Teslas in Australia have dropped dramatically in the wake of the Trump-Musk bromance. Figures just out show the brand's sales in Australia this year so far are half what they were for the same five months of 2024. The dive in sales came as Elon Musk, the creator of Tesla, became more controversial because of his scorched-earth aid to the American president. In Canberra, often seen as a torch-bearer for electric vehicles, new figures show the Chinese brand BYD gaining ground rapidly. In the first five months of this year, it sold 490 cars in the ACT - a rate of three sales a day, well up on last year. Tesla doesn't publish its sales numbers for the ACT but registrations with the government indicated a fall. Across Australia, the new figures show that BYD has started out-selling the American car once thought to be the way forward for progressive Australians. According to the stats, Australians bought 9,577 Teslas in the first five months of this year but 15,199 BYDs. In the first five months of last year, the race was the other way round, with Tesla in the lead on 18,433 sales nationally and BYD on 7809. There are two other takeaways from the new industry figures: Another relative new-comer - Polestar - said its sales were growing substantially - up by 40 per cent in the first five months of this year compared to the same period last year. Polestar has substantial Chinese money behind it but its research and development is based in Sweden and the UK. Its managing director in Australia, Scott Maynard, thought the big need now was for far more charging stations in Australia beyond the current 2,500: "Crucial to the adoption of electric vehicles is the roll-out of charging infrastructure," he said. And he accepted that politics may have tainted Tesla. "I think the brand has unfortunately been caught up in the politics of Elon Musk." There may be other factors as well, though. Richard and Dianne Czurnak are a two-car family: he drives a Tesla and she drives a BYD Dolphin. They bought the Tesla nearly three years ago when, as he put it, "There was a lot less available on the market." But then the BYD appeared, with more Chinese brands following. "The Chinese brands all becoming very competitive in price," Mr Czumak said. He also felt that Tesla hadn't really developed new models at the pace the competition has. "It has stayed basically the same, with refreshers and upgrades." And he accepted that Elon Musk's involvement in Trumpian politics may have tainted the brand. "We all understand there's a reputational aspect, and I think that has had an effect on the brand," he said. The couple drive the BYD to Sydney and back, with a short charging stop off in Pheasants Nest, just short of Sydney - one charge gets them there and back. If they were to buy a third car after their BYD and the Tesla, he would go for another Chinese car: the XPeng G6 is very similar to the Tesla Model Y - but cheaper. But there's no doubt either that Mr Musk's association with Mr Trump has tainted the Tesla brand in some "progressive" circles. One Canberra Tesla owner said earlier that she was embarrassed when she drove around. She avoided parking her cobalt blue Tesla too close to other cars in case the paintwork was keyed. "It's a weird combination of embarrassment and rage," Diana Streak said. She accepted that "it's a fantastic car", but didn't like its association with a politics she reviles. Her friends teased her about it. Since then, Mr Musk has withdrawn as an active wielder of the chainsaw on the American public service. He and Mr Trump haven't fallen out, or not yet at least - though the businessman has called Mr Trump's tax plans "a disgusting abomination", and Mr Trump isn't the sort to take such insults calmly. But the earlier apparent warm friendship - or bromance - turned the Tesla brand toxic in the eyes of some former fans: "swasticars" was the common jibe. Bumper stickers appeared saying: "I bought this before we knew Elon was crazy" and "Bought it before we knew how awful he is". Some said the car and the man were different - Mr Musk does not own a controlling share in Tesla. "Tesla is not Musk," Ross Hetherington, the vice president of the Tesla Owners Club of Australia said. "The amount of crap that's going on is insane," the Canberra-based Tesla fan said. "I bought the car because it's a great car." Sales of Teslas in Australia have dropped dramatically in the wake of the Trump-Musk bromance. Figures just out show the brand's sales in Australia this year so far are half what they were for the same five months of 2024. The dive in sales came as Elon Musk, the creator of Tesla, became more controversial because of his scorched-earth aid to the American president. In Canberra, often seen as a torch-bearer for electric vehicles, new figures show the Chinese brand BYD gaining ground rapidly. In the first five months of this year, it sold 490 cars in the ACT - a rate of three sales a day, well up on last year. Tesla doesn't publish its sales numbers for the ACT but registrations with the government indicated a fall. Across Australia, the new figures show that BYD has started out-selling the American car once thought to be the way forward for progressive Australians. According to the stats, Australians bought 9,577 Teslas in the first five months of this year but 15,199 BYDs. In the first five months of last year, the race was the other way round, with Tesla in the lead on 18,433 sales nationally and BYD on 7809. There are two other takeaways from the new industry figures: Another relative new-comer - Polestar - said its sales were growing substantially - up by 40 per cent in the first five months of this year compared to the same period last year. Polestar has substantial Chinese money behind it but its research and development is based in Sweden and the UK. Its managing director in Australia, Scott Maynard, thought the big need now was for far more charging stations in Australia beyond the current 2,500: "Crucial to the adoption of electric vehicles is the roll-out of charging infrastructure," he said. And he accepted that politics may have tainted Tesla. "I think the brand has unfortunately been caught up in the politics of Elon Musk." There may be other factors as well, though. Richard and Dianne Czurnak are a two-car family: he drives a Tesla and she drives a BYD Dolphin. They bought the Tesla nearly three years ago when, as he put it, "There was a lot less available on the market." But then the BYD appeared, with more Chinese brands following. "The Chinese brands all becoming very competitive in price," Mr Czumak said. He also felt that Tesla hadn't really developed new models at the pace the competition has. "It has stayed basically the same, with refreshers and upgrades." And he accepted that Elon Musk's involvement in Trumpian politics may have tainted the brand. "We all understand there's a reputational aspect, and I think that has had an effect on the brand," he said. The couple drive the BYD to Sydney and back, with a short charging stop off in Pheasants Nest, just short of Sydney - one charge gets them there and back. If they were to buy a third car after their BYD and the Tesla, he would go for another Chinese car: the XPeng G6 is very similar to the Tesla Model Y - but cheaper. But there's no doubt either that Mr Musk's association with Mr Trump has tainted the Tesla brand in some "progressive" circles. One Canberra Tesla owner said earlier that she was embarrassed when she drove around. She avoided parking her cobalt blue Tesla too close to other cars in case the paintwork was keyed. "It's a weird combination of embarrassment and rage," Diana Streak said. She accepted that "it's a fantastic car", but didn't like its association with a politics she reviles. Her friends teased her about it. Since then, Mr Musk has withdrawn as an active wielder of the chainsaw on the American public service. He and Mr Trump haven't fallen out, or not yet at least - though the businessman has called Mr Trump's tax plans "a disgusting abomination", and Mr Trump isn't the sort to take such insults calmly. But the earlier apparent warm friendship - or bromance - turned the Tesla brand toxic in the eyes of some former fans: "swasticars" was the common jibe. Bumper stickers appeared saying: "I bought this before we knew Elon was crazy" and "Bought it before we knew how awful he is". Some said the car and the man were different - Mr Musk does not own a controlling share in Tesla. "Tesla is not Musk," Ross Hetherington, the vice president of the Tesla Owners Club of Australia said. "The amount of crap that's going on is insane," the Canberra-based Tesla fan said. "I bought the car because it's a great car." Sales of Teslas in Australia have dropped dramatically in the wake of the Trump-Musk bromance. Figures just out show the brand's sales in Australia this year so far are half what they were for the same five months of 2024. The dive in sales came as Elon Musk, the creator of Tesla, became more controversial because of his scorched-earth aid to the American president. In Canberra, often seen as a torch-bearer for electric vehicles, new figures show the Chinese brand BYD gaining ground rapidly. In the first five months of this year, it sold 490 cars in the ACT - a rate of three sales a day, well up on last year. Tesla doesn't publish its sales numbers for the ACT but registrations with the government indicated a fall. Across Australia, the new figures show that BYD has started out-selling the American car once thought to be the way forward for progressive Australians. According to the stats, Australians bought 9,577 Teslas in the first five months of this year but 15,199 BYDs. In the first five months of last year, the race was the other way round, with Tesla in the lead on 18,433 sales nationally and BYD on 7809. There are two other takeaways from the new industry figures: Another relative new-comer - Polestar - said its sales were growing substantially - up by 40 per cent in the first five months of this year compared to the same period last year. Polestar has substantial Chinese money behind it but its research and development is based in Sweden and the UK. Its managing director in Australia, Scott Maynard, thought the big need now was for far more charging stations in Australia beyond the current 2,500: "Crucial to the adoption of electric vehicles is the roll-out of charging infrastructure," he said. And he accepted that politics may have tainted Tesla. "I think the brand has unfortunately been caught up in the politics of Elon Musk." There may be other factors as well, though. Richard and Dianne Czurnak are a two-car family: he drives a Tesla and she drives a BYD Dolphin. They bought the Tesla nearly three years ago when, as he put it, "There was a lot less available on the market." But then the BYD appeared, with more Chinese brands following. "The Chinese brands all becoming very competitive in price," Mr Czumak said. He also felt that Tesla hadn't really developed new models at the pace the competition has. "It has stayed basically the same, with refreshers and upgrades." And he accepted that Elon Musk's involvement in Trumpian politics may have tainted the brand. "We all understand there's a reputational aspect, and I think that has had an effect on the brand," he said. The couple drive the BYD to Sydney and back, with a short charging stop off in Pheasants Nest, just short of Sydney - one charge gets them there and back. If they were to buy a third car after their BYD and the Tesla, he would go for another Chinese car: the XPeng G6 is very similar to the Tesla Model Y - but cheaper. But there's no doubt either that Mr Musk's association with Mr Trump has tainted the Tesla brand in some "progressive" circles. One Canberra Tesla owner said earlier that she was embarrassed when she drove around. She avoided parking her cobalt blue Tesla too close to other cars in case the paintwork was keyed. "It's a weird combination of embarrassment and rage," Diana Streak said. She accepted that "it's a fantastic car", but didn't like its association with a politics she reviles. Her friends teased her about it. Since then, Mr Musk has withdrawn as an active wielder of the chainsaw on the American public service. He and Mr Trump haven't fallen out, or not yet at least - though the businessman has called Mr Trump's tax plans "a disgusting abomination", and Mr Trump isn't the sort to take such insults calmly. But the earlier apparent warm friendship - or bromance - turned the Tesla brand toxic in the eyes of some former fans: "swasticars" was the common jibe. Bumper stickers appeared saying: "I bought this before we knew Elon was crazy" and "Bought it before we knew how awful he is". Some said the car and the man were different - Mr Musk does not own a controlling share in Tesla. "Tesla is not Musk," Ross Hetherington, the vice president of the Tesla Owners Club of Australia said. "The amount of crap that's going on is insane," the Canberra-based Tesla fan said. "I bought the car because it's a great car." Sales of Teslas in Australia have dropped dramatically in the wake of the Trump-Musk bromance. Figures just out show the brand's sales in Australia this year so far are half what they were for the same five months of 2024. The dive in sales came as Elon Musk, the creator of Tesla, became more controversial because of his scorched-earth aid to the American president. In Canberra, often seen as a torch-bearer for electric vehicles, new figures show the Chinese brand BYD gaining ground rapidly. In the first five months of this year, it sold 490 cars in the ACT - a rate of three sales a day, well up on last year. Tesla doesn't publish its sales numbers for the ACT but registrations with the government indicated a fall. Across Australia, the new figures show that BYD has started out-selling the American car once thought to be the way forward for progressive Australians. According to the stats, Australians bought 9,577 Teslas in the first five months of this year but 15,199 BYDs. In the first five months of last year, the race was the other way round, with Tesla in the lead on 18,433 sales nationally and BYD on 7809. There are two other takeaways from the new industry figures: Another relative new-comer - Polestar - said its sales were growing substantially - up by 40 per cent in the first five months of this year compared to the same period last year. Polestar has substantial Chinese money behind it but its research and development is based in Sweden and the UK. Its managing director in Australia, Scott Maynard, thought the big need now was for far more charging stations in Australia beyond the current 2,500: "Crucial to the adoption of electric vehicles is the roll-out of charging infrastructure," he said. And he accepted that politics may have tainted Tesla. "I think the brand has unfortunately been caught up in the politics of Elon Musk." There may be other factors as well, though. Richard and Dianne Czurnak are a two-car family: he drives a Tesla and she drives a BYD Dolphin. They bought the Tesla nearly three years ago when, as he put it, "There was a lot less available on the market." But then the BYD appeared, with more Chinese brands following. "The Chinese brands all becoming very competitive in price," Mr Czumak said. He also felt that Tesla hadn't really developed new models at the pace the competition has. "It has stayed basically the same, with refreshers and upgrades." And he accepted that Elon Musk's involvement in Trumpian politics may have tainted the brand. "We all understand there's a reputational aspect, and I think that has had an effect on the brand," he said. The couple drive the BYD to Sydney and back, with a short charging stop off in Pheasants Nest, just short of Sydney - one charge gets them there and back. If they were to buy a third car after their BYD and the Tesla, he would go for another Chinese car: the XPeng G6 is very similar to the Tesla Model Y - but cheaper. But there's no doubt either that Mr Musk's association with Mr Trump has tainted the Tesla brand in some "progressive" circles. One Canberra Tesla owner said earlier that she was embarrassed when she drove around. She avoided parking her cobalt blue Tesla too close to other cars in case the paintwork was keyed. "It's a weird combination of embarrassment and rage," Diana Streak said. She accepted that "it's a fantastic car", but didn't like its association with a politics she reviles. Her friends teased her about it. Since then, Mr Musk has withdrawn as an active wielder of the chainsaw on the American public service. He and Mr Trump haven't fallen out, or not yet at least - though the businessman has called Mr Trump's tax plans "a disgusting abomination", and Mr Trump isn't the sort to take such insults calmly. But the earlier apparent warm friendship - or bromance - turned the Tesla brand toxic in the eyes of some former fans: "swasticars" was the common jibe. Bumper stickers appeared saying: "I bought this before we knew Elon was crazy" and "Bought it before we knew how awful he is". Some said the car and the man were different - Mr Musk does not own a controlling share in Tesla. "Tesla is not Musk," Ross Hetherington, the vice president of the Tesla Owners Club of Australia said. "The amount of crap that's going on is insane," the Canberra-based Tesla fan said. "I bought the car because it's a great car."
Newsweek
12-05-2025
- Automotive
- Newsweek
Why Our Pension Fund Is Halting Investments in Tesla
When I was elected as the controller of Lehigh County in Pennsylvania, one of my key responsibilities was to join a seven-person board of trustees that oversees the county's $500 million pension fund. As a pension fund trustee, I have a legal duty to act as a responsible steward of the retirement savings of 4,218 county retirees and employees. It is in this capacity that our board has decided to halt new investments in Tesla. Since Elon Musk took over at the helm of the Department of Government Efficiency (DOGE), Tesla's reputation has suffered badly. The company has been hit with a wave of negative press, mass and sustained protests, boycotts, and calls for divestment. This is having a material impact. In a recent earnings call, Tesla announced its profits in the first quarter of 2025 were down 71 percent. However, the signs that Tesla was struggling were evident before the most recent earnings calls. Elon Musk speaks in the Oval Office of the White House in Washington, D.C., on February 11, 2025. Elon Musk speaks in the Oval Office of the White House in Washington, D.C., on February 11, 2025. JIM WATSON/AFP via Getty Images Where once Tesla was the only major player in the electric vehicle (EV) field, it's now a highly competitive market. While Tesla sales were down 1.1 percent in 2024, General Motors' EV sales jumped 50 percent. And that was before Musk put Tesla's reputation through the woodchipper. In the first quarter of 2025, total EV sales in the U.S. were up 11.4 percent from the previous year, but Tesla sales were down 13.1 percent. Tesla sales have also been down across Europe, as backlash to Musk's interventions in foreign elections has grown. In China, the world's largest car market and a country in which Tesla has invested heavily, sales of all-electric BYDs increased 41.3 percent in 2024, a trend that is expected to continue now that BYD has beaten Tesla to the punch by inventing an electric vehicle that can recharge its battery in under five minutes, or roughly the time it takes to fill a car with gas. All of this helps explain why Tesla has one of the worst price-to-earning ratios of any company in the S&P 500. Measuring the ratio of a company's stock price to the company's earnings per share, price-to-earnings ratio is a method commonly used for assessing whether a company is overvalued. Currently, Tesla's price-to-earnings ratio is around 160. That means investors are paying $160 for every $1 in profits that Tesla produces. In the auto industry, the average price-to-earnings ratio is closer to 7:1. This indicates that Tesla's stock is potentially overvalued. Why would Tesla's stock still be valued so highly in the midst of declining sales and reputational carnage? The Economist explained that it's because "Tesla's valuation has long lost any connection with fundamentals and is more a bet on Mr Musk's ability to revolutionize any business that he turns his hand to." In the case of Tesla, that is largely a bet on the company conquering the market for robots and autonomous taxis. But Tesla has been promising robotaxis for a decade and has yet to launch a public service. Meanwhile, Waymo, a subsidiary of Google, already has 700 driverless taxis on the road in San Francisco, Los Angeles, and Phoenix. The debacle of the Cybertruck should also call discerning investors to question Musk's supposedly mercurial abilities. Its first new vehicle in four years, the Cybertruck was supposed to be Tesla's next big thing. But with a mere 46,000 vehicles sold in the 18 months following its launch, many analysts are calling sales a disaster for the company. Embarrassingly, the Cybertruck has been subjected to eight recalls, most recently for an issue with a glue that wasn't properly holding a side panel in place. If Tesla can't figure out how to keep a side panel glued on, should we believe they're ready to launch robotaxis? Lehigh County is far from the only institutional investor expressing concerns. In January, the Dutch pension fund, ABP, sold its $600 million stake in Tesla; in March, the $20 billion Danish pension fund, AkademikerPension, divested its shares due to reputational risks linked to Musk's political activity. In the U.S., eight State Treasurers have written an open letter to the Tesla board, expressing concerns about Musk's management of the company. Full divestment from Tesla for institutional investors can be a complicated endeavor. For now, Lehigh County has only paused investments in our actively managed funds and asked our investment manager to prepare options for divesting the company from our passively invested funds, which are largely tied up in index funds and mutual funds. It's too early to say what our investment manager will advise, and as a responsible fiduciary, we will be guided by what they tell us. However, it's not too early to see the negative impacts that Elon Musk's political activity is having on Tesla. The company has clearly reached a fork in the road. Tesla's institutional investors and its board members should act accordingly. Mark Pinsley is Lehigh County controller. The views expressed in this article are the writer's own.
