Tesla’s global sales tumbled in the first quarter of 2025, adding further pressure on CEO Elon Musk as he faces growing backlash over his role in President Donald Trump’s administration.
The electric vehicle giant delivered 336,681 units worldwide in the first three months of the year, marking a 13% decline compared to the same period in 2024. This sharp drop brought Tesla’s quarterly performance to its lowest level in nearly three years, falling short of Wall Street expectations.
The company attributed the decline to “the loss of several weeks of production” as it prepared to ramp up upgrades for the Model Y. However, the weak numbers intensified concerns among analysts and investors about Tesla’s long-term growth prospects—especially as Musk’s deepening involvement in US politics continues to overshadow his leadership at the automaker.
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Since Trump returned to the White House, Musk’s leadership has drawn fierce criticism due to his role as head of the so-called “Department of Government Efficiency” (DOGE), which has spearheaded sweeping federal spending cuts. As an unelected figure, Musk’s influence has sparked concerns about transparency and accountability, while his aggressive layoffs in government agencies have made Tesla a target for consumer boycotts and public backlash.
Musk, who contributed more than $270 million to Trump’s re-election campaign, has also used his social media platform, X, to attack critics of the administration. This has further politicized Tesla’s brand, alienating some consumers and investors. The result has been a sharp drop in Tesla’s reputation, particularly in key markets like Europe, where Musk’s association with Trump has become a liability.
Tesla shares initially fell over 6% following the earnings report but later rebounded after Politico reported that Musk may soon step down from his formal role in the administration. Sources cited in the report said White House officials were growing frustrated with Musk’s unpredictability and viewed him as a political risk, particularly after a Musk-backed judicial candidate in Wisconsin suffered a significant defeat to a liberal opponent.
While Trump publicly praised Musk as “amazing,” he hinted at a possible transition, saying, “I also think he’s got a big company to run, and so at some point he’s going to be going back. He wants to.”
China’s Model Y Success Fails to Offset Global Decline
Despite Tesla’s global struggles, the company saw a strong performance from the Model Y in China, where demand for the all-electric crossover remained robust. In March 2025, Tesla China sold 43,370 new Model Y units, making it the best-selling battery electric vehicle by volume in the country. The success of the revamped Model Y highlights the continued importance of Tesla’s China operations, which remain a critical pillar of the company’s revenue.
However, analysts noted that even with China’s solid numbers, Tesla’s overall Q1 results reflect deeper challenges, including slowing EV demand in North America and Europe. The Cybertruck, which Musk once touted as a revolutionary product, has failed to gain traction, with weak sales contributing to Tesla’s disappointing quarter. The company did not break out Cybertruck deliveries in its report, but the figures suggest poor performance, further exacerbated by a mass recall in March due to an exterior panel defect.
Investor Concerns and Musk’s Leadership Under Fire
Wedbush Securities analyst Dan Ives, a longtime Tesla bull, described the Q1 results as “a disaster on every metric,” warning that Musk’s political entanglements were damaging Tesla’s brand and investor confidence.
“It’s a fork in the road moment,” Ives said. “The more political he gets… the more the brand suffers, there is no debate. This quarter was an example of the damage Musk is causing Tesla.”
Tesla shareholder Ross Gerber echoed similar sentiments, taking to X to criticize the company’s performance.
“These numbers suck,” he posted. “The Cybertruck is basically not selling. The brand is broken and may not be fixable. The board of directors is 100 percent responsible.”
Despite the weak results, Tesla’s stock finished the day up 5.3% as speculation swirled about Musk’s potential retreat from his government role as DOGE lead. However, questions remain about whether Musk can successfully navigate Tesla through its current challenges while balancing his political ambitions.
With rising competition from Chinese automakers, an increasingly skeptical investor base, and ongoing consumer backlash, Tesla faces what could be one of the most defining periods in its history.