In a surprising move, Elon Musk has reportedly fired Tesla’s North America and Europe operations head, Omead Afshar, following disappointing sales figures and investor concerns about the company’s future. This decision comes as Tesla struggles with falling deliveries, especially in Europe and North America, where the company has seen a significant drop in sales.
Analysts have speculated that Musk’s political views may have played a role in this downturn, but Tesla executives have pointed to factory retooling as a contributing factor.
Tesla’s stock has been on a downward trajectory, losing 9.7% over the past month. A key driver behind this decline is the troubled launch of Tesla’s robotaxi service, which has failed to meet expectations. According to a Baird report, the company’s vehicle deliveries for Q2 are expected to be around 377,000, which is lower than the consensus estimate of 392,800.
Another factor contributing to the sales slump is weak data from retailers, particularly affecting the new Model Y. Tesla’s European market share fell to 1.2% in May, down 0.6 percentage points compared to the same time last year. Overall, Tesla’s sales in Europe dropped by 27.9%, despite a 27.2% increase in overall fully electric vehicle sales. The company is facing growing competition from Chinese electric vehicle manufacturers, who offer comparable quality at lower prices.
The firing of Afshar, a long-time ally of Musk, marks a significant change for Tesla as it continues to grapple with a drop in demand and unclear prospects for its ride-sharing initiatives. With the robotaxi program still facing challenges and Tesla’s stock continuing to slide, the company will need to find a way to regain investor confidence and reverse the declining sales trend.