Tesla faces its worst crisis in years: falling sales, boycotts and political tensions
Tesla delivered nearly 337,000 cars in the first quarter of 2025, a 13% drop compared to the same period last year. This is the steepest decline in the company’s history, which has generated concern among analysts and investors.
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Factors behind Tesla’s slump
While Tesla attributes its sales decline to the transition to a new model of its best-selling vehicle, industry experts point to other reasons. Among them, increased competition with Chinese company BYD and growing distrust of Musk due to his role in Donald Trump’s administration.
Ross Gerber, an early investor in Tesla and CEO of Gerber Kawasaki Wealth and Investment Management, expressed his concern via social network X and highlighted the company’s disastrous numbers.
Add to this crisis, protests and seemingly growing global discontent. Musk’s association with U.S. politics has generated adverse reactions globally. His leadership of the Department of Government Efficiency (DOGE), a Trump initiative to reduce government spending, has intensified the backlash against him and his companies. As a result, protests and boycotts against Tesla have erupted in several cities in the United States and Europe.
Some dealerships have been vandalized, prompting the Trump administration to call these acts “domestic terrorism” and warn that legal action will be taken against those responsible.
Meanwhile, reports from Politico suggested that Musk could step down from his government role in the coming weeks, prompting a spike in Tesla’s share price following the news. However, the White House dismissed these reports as “unfounded”.
Impact on stock and investor confidence
Tesla shares have experienced a 25% drop since the start of the year, raising alarm among investors. Dan Ives, an analyst at Wedbush, stated that Musk’s political involvement with DOGE is affecting brand perception. “The more political Musk gets with DOGE, the more the brand suffers,” he said.
Concern has also reached investment funds. Randi Weingarten, president of the American Federation of Teachers, urged several pension funds to reevaluate their holdings in Tesla, arguing that the company could be at financial risk because of Musk’s distraction with political issues.
For his part, New York City Comptroller Brad Lander announced that he is considering a lawsuit against Tesla on behalf of the city’s pension funds, alleging that accumulated losses exceed $300 million in just three months.
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Tesla’s response and uncertain future
Tesla has avoided responding directly to the criticism, but in a report sent to the U.S. Securities and Exchange Commission, the company downplayed the significance of recent sales data. It argued that these numbers should not be considered a true reflection of the financial performance for the quarter, the full results of which will be known on April 22.
In addition, Tesla recalled that it temporarily halted production of the Model Y at the beginning of 2025, which may also have influenced the sales drop.
As the release of financial results approaches, Tesla’s future remains uncertain. The key question is whether the brand will be able to overcome its crisis or whether the controversy surrounding Elon Musk will continue to undermine customer and investor confidence.
