This weekend’s disturbing scenes in which hundreds of protesters stormed the grounds of the Tesla factory near Berlin served as a fresh reminder of a growing image problem in Europe’s largest car market.
Ostensibly, they were there to protest an expansion of the factory that would bring more jobs and economic growth to the structurally poor region. Two dozen have since been detained, and 76 face criminal charges. In reality, many demonstrators were there to direct their anger at unfettered capitalism in general and its spirit animal in particular.
“Naturally we’re against Elon Musk,” Disrupt Tesla spokesman Ole Becker toldDie Welt.
This is the second embarrassment for a state and federal government that has been unable to convince the local community of the value the Tesla factory brings to an area formerly a part of communist East Germany.
need to investigate ring leaders of this protest and see where their funding comes from
— Emmet Peppers (@EmmetPeppers) May 10, 2024
In March a little-known group of fringe arsonists calling themselves the Volcano Group set fire to an unguarded high-voltage electricity pylon, cutting off the power supply to the factory.
At the time, Tesla estimated the damages to be roughly $1 billion.
The image problems resulting from this weekend’s protests are only the latest headache for Tesla in the German EV market, the EU’s largest, which is comprised of a quarter of overall industry volumes, according to industry statistics.
Musk’s car brand lost a third of its volumes in April from the previous year, a result so poor that even niche Japanese carmakers Suzuki and Mitsubishi managed to surpass it.
This wasn’t a blip brought entirely on by the recent act of sabotage either.
Registrations of new Teslas, which closely reflect sales with a minor time lag, collapsed by 36% in the first four months of this year.
This helps contribute to a global manufacturing overhang estimated to be roughly 1.2 million of his installed 3 million vehicle annual capacity.
Why Tesla is struggling in Germany
Part of that sales drop no doubt reflects a challenging German EV market after the government ended its generous subsidies in December.
Registrations of fully electric vehicles as a share of the entire new car market plunged to just 12% through April of this year from an average level of 18% during the full year of 2023.
It also reflects an inability to crack the commercial fleet market, which typically is twice as large as the demand for new cars from retail consumers.
Tesla’s series of drastic price cuts worldwide have burned a number of major corporations, including business software giant SAP and rental agency Sixt, since it reduced the value of the assets on their books overnight.
wake up babe new TSLAQ conspiracy theory just dropped https://t.co/sQSYfnDuxm
— Whole Mars Catalog (@WholeMarsBlog) May 11, 2024
Germany’s own EV industry is also slowly chipping away at Tesla’s market share.
At roughly 14,650 cars, the Volkswagen brand alone has sold almost as many EVs as Tesla so far this year, even without including those from VW group siblings Audi, Skoda, Porsche, or Cupra.
Lastly, Musk’s brand of politics, cited in the Volcano Group letter claiming responsibility for the March attack, is likely also affecting demand.
Tesla bears subsequently speculated that the volatile and irascible Tesla CEO may himself be behind the protests to cook up an excuse to shut the problematic plant down.
The Tesla boss, however, seemed to point the finger at his competitors as secretly being behind this weekend’s protests.
“I wonder who their puppet masters are?” wrote Musk on Friday.
