Tesla experienced a significant setback in the first quarter of 2025, reporting a 13% drop in vehicle deliveries, the sharpest year-on-year decline in the company’s history. The automaker delivered 336,681 vehicles in the first three months of the year, a notable decrease from nearly 387,000 in the same period last year. This drop has been attributed to various factors, including a temporary production halt for Model Y updates and growing political backlash against CEO Elon Musk.
Musk’s political affiliations, particularly his ties to former US President Donald Trump, have sparked protests, boycotts, and even vandalism at Tesla facilities globally. Critics argue that Musk’s increasing political influence is distracting him from his corporate duties, leading to a dip in Tesla’s brand image, especially among environmentally conscious consumers. Furthermore, the European market saw a sharp 49% drop in Tesla sales during the first two months of 2025, despite an overall rise in electric vehicle sales across the continent.
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Tesla’s competition has also intensified, especially from Chinese EV maker BYD, which outpaced Tesla in global sales during the quarter. While Tesla still holds a lead in full-year sales, analysts predict that BYD could overtake it by the end of 2025. Additionally, the global supply chain is facing challenges, exacerbated by new tariffs imposed by the Trump administration, further affecting Tesla’s production costs.
In a glimmer of hope for Tesla, shares rose by over 5% following reports that Musk may step down from his advisory role in the White House’s Department of Government Efficiency (DOGE). Although the White House dismissed the reports as false, the market reaction was positive, offering some relief to Tesla investors amid a series of losses.
