As Crisis at Tesla Deepens, a Hail Mary Is Turning Out to Be a Major Bust

Tesla investors were hopeful that the latest refresh of the EV maker's bestselling Model Y would breathe new life into plummeting sales.

But say it ain't so: The addition to the company's rapidly-aging lineup, which launched in January, has turned out to be a dud — at least as far as consumer interest is concerned. Rock-bottom financing deals being offered on the car indicate just how far from being a hot ticket item they actually are, as Reuters reports.

In an attempt to compete, Tesla is matching other carmakers' offerings with zero percent financing, suggesting that cars' rarity has become a thing of the past as the competition is starting to grow substantially for the Elon Musk-led firm.

"Why would you discount and have all these incentives and offers literally out of the gate?" EV data firm Paren chief analyst Loren McDonald told Reuters. "That just doesn't make sense when your margins are already at multiyear lows. That suggests very strongly that there is a demand problem."

Sales have fallen off a cliff, a crisis deepened by Musk's embrace of far-right ideals and amid his ongoing involvement in the Trump administration's overhaul of the US government. Sales in China have slumped significantly, while experts warn that the company is facing a "death spiral" in Europe.

Despite the alarming numbers, investors have seemingly been reinvigorated by president Donald Trump pulling back on tariffs aimed at China and Musk's promises to spend more time leading the carmaker. Tesla's shares are up over 18 percent over the last five days, reentering the trillion-dollar club.

But as recent history has shown, that valuation has increasingly become divorced from Tesla's structural woes and a greatly tarnished brand overall.

The new Model Y — which to the average consumer is almost indistinguishable from its predecessor — likely won't be the company's saving grace, either.

"No one's looking at that vehicle thinking, 'Oh, that's totally different and new,' and I think that may be part of the issue," Edmunds head of insights Jessica Caldwell told Reuters.

And it's not just the new Model Y. The automaker's inventory of unsold Cybertrucks has reached a record high of over 10,000 units. So far, the company has fallen dramatically short of Musk's promises of selling a quarter million of the pickups per year.

Meanwhile, Musk has bet the future of the company on a purportedly self-driving robotaxi, which will be slowly rolling out, starting in Austin this summer.

"There will be millions of Teslas operating fully autonomously in the second half of next year," Musk vowed during the company's earnings call last month.

But given his abysmal track record of making good on his word, that's far from being a guarantee.

More on Tesla: A Tesla Dealership Manager Blamed Elon Musk for Tanking Sales and Was Immediately Fired

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