Musk to blame for Tesla's worst sales quarter since 2022
What's the story
Tesla has reported a major decline in its vehicle sales for the first quarter of 2025. The electric car manufacturer saw a 13% drop, its worst quarter since 2022. The downturn is attributed to several factors including an aging product lineup and increased competition from other automakers. Backlash against CEO Elon Musk's political affiliations, specifically his involvement with the Department of Government Efficiency (DOGE) in the US is also to blame.
Sales figures
Q1 2025 sales fall short of expectations
Tesla delivered a total of 336,681 vehicles worldwide between January and March this year. This number missed the expected 408,000 deliveries according to analysts surveyed by financial services firm FactSet. The company's sales during the period also marked a decline from the previous year's first quarter when they sold 387,000 cars. This was despite providing massive discounts and financing options to lure customers.
Political fallout
Musk's political involvement and its impact on Tesla
Musk's political involvement has sparked a major backlash against Tesla. The company's cars were vandalized in protest of Musk's actions as part of his role in DOGE. At a rally, he was seen making a gesture that his estranged daughter described as "definitely a Nazi salute." This also seems to have soured customers' opinions about the EV maker. Matt Britzman from UK-based financial services company Hargreaves Lansdown said many investors were already prepared for disappointing financial results.
Slowdown
Model Y sales have gone down
In recent months, Tesla has ceded some of its market share to competitors like BYD. The latter reported a 60% sales surge globally in the first quarter of the year, while Tesla stumbled. One major reason Tesla is suffering is because car buyers are holding off from purchasing its bestseller, the Model Y. This is because there are plans for launching an updated version later this year.
Uncertain future
Future outlook amid challenges
After Politico reported in February that Musk might step down from his White House role, Tesla shares jumped 5% at that time. To this end, Britzman said until Musk refocuses his attention on Tesla, the company's shares will remain volatile.