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Sales of Tesla have fallen in Europe for five consecutive months despite the rollout of its flagship Y model and chief executive Elon Musk’s decision to step back from his political role in the US.
The carmaker, which is seeking to reboot the flagging business with the recent launch of its robotaxi service, sold 13,863 electric vehicles in wider Europe and the UK in May, down 28 per cent from a year earlier, according to the European Automobile Manufacturers’ Association (ACEA).
Tesla’s sales and profits collapsed from earlier this year on the back of an ageing product portfolio and Musk’s political activism, prompting the billionaire entrepreneur to cut back on his political activities and focus on running the car company.
The weakness in Tesla’s sales has helped to boost demand for offerings from rival European brands with registrations of new electric vehicles rising 27.2 per cent in the region in May compared with a year earlier. Sales of Volkswagen group rose 3.4 per cent while BMW’s registrations increased 5.6 per cent.
Barclays expects Tesla’s second-quarter deliveries to be about 375,000 units, down 16 per cent year on year and below market consensus about 400,000 vehicles.
On top of weak sales in Europe, Tesla this week received an order from France’s consumer affairs and fraud investigators to stop “deceptive” claims over the level of autonomy of its cars or face thousands of euros in fines.
A handful of Tesla drivers in France are also suing the company to terminate the leases for their vehicles, alleging Musk’s political activities have made their cars “far-right totems”.
But analysts say Tesla’s share price has mostly decoupled from the performance of its EV business with the stock rising nearly 6 per cent since the Sunday launch of its autonomous ride-hailing service in its home city of Austin.
Musk has claimed the robotaxis and artificial intelligence represented Tesla’s future, predicting that its pivot could take the company’s valuation as high as $5tn, about five times its current market value.
The launch was low-key with only about 10 robotaxis on the roads in limited areas and with a human safety driver on board amid regulatory scrutiny of its self-driving technology.
The robotaxi service began with customers paying a $4.20 flat fee as Tesla looks to generate revenue on driverless rides even as sales of vehicles decline.
Despite the bullish view among some investors, Barclays analyst Dan Levy said there was still work ahead to unlock the potential for autonomous vehicles.
“We believe the much better question ahead is on the path of scaling, which we believe will be long, and we caution against over-optimism,” he added.
Tesla did no immediately respond to a request for comment.
