Tesla’s sales have fallen to their lowest point in three years, coinciding with growing backlash against CEO Elon Musk.
The electric vehicle manufacturer delivered nearly 337,000 cars in the first quarter of 2025, marking a 13% decline compared to the previous year. The disappointing figures led to a sharp drop in Tesla’s stock price during early trading on Wednesday.
While Tesla faces mounting competition from Chinese automaker BYD, analysts suggest that Musk’s controversial role in the Trump administration has also played a significant role in the company’s struggles.
The company has attributed the decline in deliveries to the transition to a new version of its most popular model. However, some experts believe Musk’s leadership is a contributing factor.
“These numbers suck,” remarked Ross Gerber, an early Tesla investor and CEO of Gerber Kawasaki Wealth and Investment Management, in a post on X. He further stated, “The brand is broken and may not be fixable.” Gerber, once a strong Musk supporter, has recently called for Tesla’s board to remove him as CEO.
Growing Backlash Against Musk
Musk’s outspoken political involvement has sparked protests and boycotts globally. He currently leads President Donald Trump’s Department of Government Efficiency (DOGE) initiative, aimed at cutting federal spending and reducing the government workforce.
On Wednesday, Politico reported that Trump had informed his inner circle that Musk would soon step back from the administration. Following this news, Tesla’s stock price briefly rebounded.
However, the White House dismissed the report as “garbage,” clarifying that Musk is a special government employee and, by law, can only serve 130 days per year in the administration, making a June departure more likely.
Musk, the world’s richest person, contributed over $250 million to support Trump’s re-election in November. Recently, he also invested millions in a Wisconsin Supreme Court race, backing former Republican Attorney General Brad Schimel, who suffered a resounding defeat on Tuesday.
The backlash against Musk has led to “Tesla Takedown” protests at dealerships across the U.S. and Europe. Reports of vandalism against Tesla vehicles have surfaced, prompting Trump to declare that individuals defacing Teslas would be charged with “domestic terrorism.”
Following an arson attack at a Tesla outlet in Rome that destroyed 17 vehicles, the Italian government advised police to increase security at Tesla dealerships.
Musk’s Struggles as Tesla’s CEO
Concerns about Musk’s ability to effectively manage his businesses, including Tesla, have intensified. In a recent interview, he acknowledged facing difficulties, saying, “Frankly, I can’t believe I’m here doing this.”
Tesla’s stock has lost more than 25% of its value since the start of 2025, with shares continuing to struggle as of 13:51 EDT (18:51 BST) on Wednesday.
Wedbush analyst Dan Ives did not mince words, stating, “We are not going to look at these numbers with rose-colored glasses… they were a disaster on every metric.” He added, “The more political [Musk] gets with DOGE, the more the brand suffers. There is no debate.”
Tesla declined to comment when approached by the BBC but acknowledged in a filing with the U.S. Securities and Exchange Commission that the reported sales figures “represent only two measures” of the company’s overall performance and “should not be relied on as an indicator of quarterly financial results.”
The company plans to release its full earnings report on April 22, detailing key factors such as average selling prices, cost of sales, and foreign exchange movements. Additionally, Tesla noted that it had temporarily halted production of its Model Y SUVs in January.
Concerns from Investors and Pension Funds
Tesla’s poor performance has raised concerns among major investors. Randi Weingarten, president of the American Federation of Teachers—one of the most powerful labor unions in the U.S.—warned public pension funds about Tesla’s troubling sales figures.
She described the numbers as “shaping up to be abysmal” and urged pension funds to scrutinize their Tesla holdings, questioning whether money managers were doing enough to “safeguard retirement assets.”
“These declines seem in part to be driven by Musk spending his time pursuing political activities, some of which appear to be in conflict with Tesla’s brand and business interests, rather than managing Tesla,” Weingarten wrote.
New York City’s comptroller has already announced plans to sue Tesla on behalf of the city’s massive pension funds, which have reportedly lost more than $300 million in the past three months due to the company’s declining stock price.
“Elon Musk is so distracted that he’s driving Tesla off a financial cliff,” Comptroller Brad Lander stated.
As Tesla struggles with declining sales and mounting criticism of its CEO, investors and analysts alike are closely watching whether Musk’s political entanglements will continue to weigh on the company’s future.