Six months after Elon Musk left the Trump administration to the great relief of Tesla investors worried about boycotts, the world’s richest man has announced some good news: Sales of Tesla cars are back.
Well, maybe.
The electrical vehicle maker run by Musk reported Thursday that car sales jumped 7% in the three months through September after plunging for most of the year as people turned off by his embrace of President Donald Trump and far right politicians in Europe balked at buying his cars.
But the jump comes with a significant caveat: Tesla benefited from consumers taking advantage of a $7,500 tax credit before it expired on Sept. 30, a surge in buying that helped all EV makers.
In fact, many Tesla rivals saw sales jump more. Fellow EV maker Rivian Automotive reported a 32% increase.
Tesla stock rose sharply on the sales news, but then fell into losses as financial analysts expressed skepticism about whether the new number signals a true turnaround, given all the anti-Musk backlash.
“I don’t think most people are any more enamored 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 a big Tesla bull, Dan Ives of Wedbush Securities, was cautious, noting there are “still demand issues.”
Tesla stock dropped 3% to $446 in early afternoon trading in New York.
Still, it was a blowout number with sales hitting 497,099 vehicles versus 462,890 in the same period last year. Analysts expected sales to fall slightly 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 canceling his Netflix subscription because of critical comments made by an employee of the streaming services company, which appeared to spark a wave of cancellations in turn.
The sharp fall in Tesla stock 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 been successful in shifting investor attention away from cars to other aspects of the business — the rollout of its driverless robotaxi service planned for several cities 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 help keep his attention on the company, Tesla’s board proposed last month a new pay package that would allow Musk to earn $1 trillion over the next several years if he meets certain financial goals. The pay package, unprecedented for U.S. companies already known for outsized CEO compensation, recently drew criticism from Pope Leo in an interview lamenting widening income gaps.
If Musk meets his pay goals, he could be setting a record on top of his own record. He recently became the first person ever to hit $500 billion in net worth, at least according to rich list compiler Forbes magazine.
The 7% sales rise in the last quarter compares with a 13% plunge 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, with sales plunging 40% in more than two dozen countries after he publicly supported far-right politicians there.
Musk called the British prime minister 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.
For her part, the Tesla head of the board of directors who approved Musk’s latest pay package recently told Bloomberg that she is not sure if Musk’s politics have had any impact on the company’s finances. Robyn Denholm has earned nearly $700 million in compensation for serving on the board since 2014, a package that itself has drawn criticism.
Tesla reports 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 launched in Austin in June, and has had some hitches with reports of the cabs stopping suddenly for no reason and driving in the opposing lane in one instance. But Musk has says the driverless rides will be available in several other cities by the end of next year.
—Bernard Condon, AP business writer