Tesla appeared to be losing command of the market it effectively created after it reported a stunning drop in quarterly sales on Tuesday, raising fresh questions about Elon Musk’s leadership of the company.
The sales decline caught investors off guard as rivals like BYD of China and Kia and Hyundai of South Korea reported increases in electric vehicle sales, suggesting that slower overall demand for battery-powered models was not the only explanation for Tesla’s problems.
Tesla pioneered the market for electric vehicles with its Model 3 sedan and Model Y sport utility vehicle, which proved that battery-powered cars could be appealing, practical and profitable. The cars revolutionized the auto industry and forced established carmakers to develop their own electric models.
But the market is evolving in ways that may not favor Tesla. In contrast to the early adopters who fueled Tesla’s rise, mainstream buyers may be put off by the vehicles’ unconventional design, including minimalist interiors and lack of buttons and switches. Almost all functions in Tesla vehicles are controlled from a large screen on the dashboard.
The system “makes it thoroughly distracting to adjust almost anything within the vehicle while motoring down the road,” Consumer Reports wrote in a review on Tuesday of a new version of the Model 3.
Tesla, which sells cars online and does not have many showrooms, is often the target of complaints about poor service. That may provide an advantage to established carmakers, like Ford Motor and General Motors, that have extensive dealer networks and are ramping up production of electric vehicles.