Tesla sales jump after months of boycotts: Can the momentum continue?

Months after Elon Musk left the Trump administration — appeasing Tesla investors worried about boycotts — the world's richest man has announced some good news. Sales of Tesla cars are back. Well, maybe.

Musk's EV company reported on Thursday that car sales jumped 7% in the three months through September after plunging for most of the year. Musk's embrace of US President Donald Trump and far-right politicians in Europe turned away large swathes of customers, who came to associate the brand with Musk's controversial ideology.

But the jump comes with a caveat. Tesla benefitted from consumers in the US taking advantage of a $7,500 (€6,400) tax credit before it expired on 30 September, prompting a surge in buying that helped all EV makers.

In fact, many Tesla rivals saw sales rise more. Rivian Automotive, for example, reported a 32% increase.

Tesla stock rose sharply on the sales news, but closed the day down around 5% amid scepticism that the new number really signals a turnaround given all the anti-Musk backlash.

“I don’t think most people are any more enamoured with Elon now than they were a few months ago," said Telemetry Insight's Sam Abuelsamid. "I expect this is more a blip for Tesla than the restart of growth.”

Even Tesla bull Dan Ives of Wedbush Securities was cautious, noting that there are "still demand issues”.

Still, it was a blowout number with sales hitting 497,099 vehicles, versus 462,890 in the same period last year. Analysts expected a small drop to 456,000.

Investors cheered Musk’s decision in April to leave Washington for Austin, Texas, where Tesla is headquartered. But he is still heavily involved in political and social wars, alienating potential car buyers.

On Wednesday, he posted on X that he was cancelling his Netflix subscription because of what he termed "transgender woke agenda", taking offense with the show "Dead End: Paranormal Park", which features a transgender character. Musk also responded to a post criticising alleged statements made by the show’s creator, Hamish Steele, related to the assassination of conservative activist Charlie Kirk.

Musk's renewed focus on Tesla

The sharp fall in Tesla stock on Thursday was remarkable as investors have been surprisingly optimistic about the company in recent weeks, despite terrible financial figures.

Investors drove the stock up 34% in September alone in a bet that Musk’s planned new cheaper version of his bestselling Model Y will recharge sales.

Musk has also shifted investor attention away from cars to other aspects of the business, such as the rollout of its driverless robotaxi service and its Optimus robots for factory work and household chores.

Driving the stock higher has also been Musk’s apparent renewed focus on the company.

To hold his attention, Tesla's board proposed last month a pay package that would allow Musk to earn $1 trillion (€850 billion) if he meets certain financial goals over the next several years. The pay offer, unprecedented for US companies known for outsized CEO compensation, drew criticism from Pope Leo in an interview lamenting widening income gaps.

If Musk meets the goals, he could set a record on top of his own record. He recently became the first person ever to hit $500bn (€430bn) in net worth, at least according to Forbes magazine's rich list.

Backlash in Europe

The 7% sales rise in the last quarter compares with a 13% drop in the first three months of the year when Musk led Trump’s government cost-cutting efforts at the Department of Government Efficiency. In the following three months through June, sales plunged 13% again.

The anti-Musk backlash in Europe had also been fierce. Sales plunged 40% in more than two dozen countries after he publicly supported far-right politicians there.

Musk said a British prime minister was an “evil tyrant” who belongs in prison and told Germans “things will get very, very much worse” in their country if they didn’t vote for the anti-immigrant Alternative for Germany party. Protests broke out in several cities, including a hanging of the billionaire in effigy in Milan and posters in London likening him to a Nazi.

Robyn Denholm, Tesla's head of the board of directors, nonetheless told Bloomberg that she was unsure if Musk’s politics have had any impact on the company’s finances.

Denholm has earned nearly $700 million (€600mn) in compensation for serving on the board since 2014, a package that itself has drawn criticism.

Tesla will report third-quarter earnings later this month. Profits for the previous quarter fell 16% as the company continued to lose market share to European EV makers and fast-growing Chinese rivals, such as BYD.

Musk's new robotaxi service, which began with a test-run in Austin in June, has had some hitches. There have been reports of the cabs stopping suddenly for no reason and even driving in the opposing lane. But Musk says the service will quickly roll out anyway, with launches in several other cities earmarked for the end of next year.