Tesla has reported a sharp 13% decline in its quarterly sales, marking its weakest performance in nearly three years. The electric vehicle (EV) giant is facing mounting challenges, including CEO Elon Musk’s political entanglements, increasing global competition, and consumers delaying purchases in anticipation of a refreshed Model Y.
During the first quarter of 2025, Tesla delivered 336,681 vehicles, significantly below market expectations of 372,410 units. This unexpected drop follows the company’s first-ever annual sales decline in 2024. Analysts attribute the slump to Tesla’s prolonged product launch delays and Musk’s controversial political activities in the U.S. and Europe, which have sparked global protests and even acts of vandalism against Tesla charging stations.
Musk’s vocal support for far-right parties in Germany and his role in spearheading U.S. government cost-cutting measures have led to backlash from consumers and shareholders alike. Many Tesla owners have sought to distance themselves from Musk, leading to an uptick in trade-ins. This week, Tesla’s stock tumbled further after reports suggested Musk may step down as an adviser to U.S. President Donald Trump—though the White House denied such claims.
The EV market is also becoming increasingly competitive, with Chinese automaker BYD projected to surpass Tesla’s market share this year. According to Counterpoint Research, BYD is expected to hold a 15.7% share of the EV market, overtaking Tesla’s 15.3%.
To counter declining sales, Tesla recently introduced a refreshed Model Y with a sleeker design and updated features. However, the retooling of production lines across all four Tesla factories led to weeks of lost production time, further contributing to the disappointing first-quarter sales figures.
Investors are now looking ahead to Tesla’s first-quarter earnings report, set for April 22. The company’s future prospects remain uncertain, particularly as sales in key European markets such as France and Sweden continue to decline. While Musk has previously forecasted a 20-30% sales growth for 2025, skepticism remains high regarding demand for the refreshed Model Y and the much-anticipated but yet-to-launch affordable EV model.
With Tesla’s stock losing 45% of its value since mid-December, the coming months will be crucial for Musk and his team to regain investor confidence and restore the brand’s market dominance.
