Don't look now, but when it rains, it pours. That's surely how Tesla (TSLA 3.59%) investors feel recently as problems continue to mount for the young automaker. Not only is the automaker dealing with tariffs that affect costs of imported vehicle parts, it's dealing with declining sales overseas and pushback from CEO Elon Musk's political career. If that's not enough, here's some information on how Tesla could be becoming more untrustworthy, and how its Cybertruck was outdone by a rival.
What's going on
It sounds strange to say it out loud. But two things can be true at once: Tesla arguably has done more to advance electric vehicles than any company in our lifetime, and the company also continually overpromises and underdelivers. But there's one recent incident where investors might find the company untrustworthy -- and that's bad news.
Last November, Tesla ended a unique policy that prohibited U.S. leasing customers from buying their cars outright at lease-end. Originally, the strategy was that Tesla wasn't enabling customers to buy their vehicles at lease-end because Tesla wanted them for robotaxi ambitions, which have yet to materialize.
Now some people are upset to find out that Tesla has often been taking these off-lease vehicles, upgrading them with over-the-air updates, and reselling them to buyers who would pay more than the lease-end consumer.
Not only does this speak to the disappointment of robotaxi development, it speaks to the track record Tesla has of overpromising, underdelivering, and now becoming slightly untrustworthy. Tesla has much work to do on its brand image.
Tesla's Cybertruck. Image source: Tesla.
Cybertruck goes down
The Cybertruck was always a swing for the fences with its unique design. For the most part, it's been a commercial flop with disappointing sales and plunging prices. In fact, an analysis by CarGurus, a used-car sales and data service, found that average selling prices (ASPs) of Teslas fell 7.6% over the past year, compared to a 0.8% decline for a composite index of all brands. More specifically, prices for Tesla's Cybertruck have plunged 46% over the past year, while Model Y prices fell 14.1%.
The Cybertruck recently handed off the electric vehicle truck sales crown to rival Ford Motor Company (F 0.73%). The Cybertruck posted 2,170 registrations in March, short of Ford's F-150 Lightning by roughly 400 registrations, according to S&P Global Mobility. During the first quarter, the Cybertruck tallied 7,126 registrations to the Lightning's 7,913 -- as Tesla doesn't break down sales by country or model, registrations serve as a proxy.
"The Cybertruck is an easy target, caught in the chaos of Elon Musk's childish, irrational, and reckless political behavior. As a result, the lust has faded for this already controversial truck," said Robby DeGraff, an analyst at AutoPacific, according to Automotive News.
This is a long way from the promises of the Cybertruck competing with even gasoline versions of full-size trucks, which sell tens of thousands monthly.
NASDAQ: TSLA
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What it all means
Currently Tesla is facing mounting problems, many of which begin with Musk's political agenda. While the company deals with tariff headaches, protests, declining sales, and political backlash, it also must focus on the future of the company, which is becoming more uncertain after each robot is unveiled. Ultimately, most of this pushback will likely eventually blow over, fortunate for long-term investors. But Tesla certainly has work to do fixing its once-unflappable brand image.
