Tesla is experiencing a steep drop in sales as a mix of increasing competition, stock shortages, and a decline in electric vehicle (EV) sales strike the company severely. Furthermore, CEO Elon Musk’s growing politicization, especially his relationship with US President Donald Trump and extreme-right European parties in Europe, has prompted consumer outrage and dented his car sales around the globe.
The firm has been facing decline sales, car recalls, and increasing public outrage. Vandalism and puting on fire against Tesla showrooms and merchandisehas increased all over the US. This shows increasing dissatisfaction with Musk’s political afliation and activities.
Tesla declines in Europe
The sales of Tesla in the European markets have dropped greatly in the first two months of 2025. According to the European Automobile Manufacturers’ Association (ACEA), new registrations fell by 49% to 19,046 units compared to the same period last year. This downturn comes despite an overall 28.4% increase in EV sales across the EU. However, the total number of electric vehicle registrations reached 255,489 units in Europe. Tesla’s market share in the region now stands at just 1.1% for January and February, increasing slightly to 1.4% in March but still lagging behind competitors.
Germany, Europe’s largest automotive market, has been particularly tough for Tesla. Sales in the country plummeted by 60% in January, followed by an even sharper 76% decline in February. The drop coincided with Musk’s vocal support for Germany’s far-right Alternative for Germany (AfD) party during the general election. This political alignment appears to have alienated many consumers. Additionally, incidents of Tesla vehicles being set on fire have been reported in Germany since the beginning of 2024, which also damaged the brand’s reputation.
China Replaces
Tesla’s woes have enabled Chinese and European electric vehicle makers to pick up market share. Statistics from JATO Dynamics indicate that Chinese-owned automotive brands led Tesla in Europe, with BYD reporting a whopping 94% year-on-year growth in February. Polestar, another EV rival, recorded an 84% rise in sales. Even as BYD gains traction, analysts observe that its total volume of sales is still lower than Tesla’s at present.
The increasing price of raw materials has compounded Tesla’s troubles. Metal prices rallied after Trump declared a 25% tariff on steel and aluminum imports, tightening Tesla’s costs even more. The shutdown of German government EV subsidies meanwhile has caused the entire country’s electric car market to slow down, but Tesla’s drop has been much worse than the overall industry trend.
Public Backlash
Public sentiment towards Tesla has taken a hit, with some owners displaying stickers that read, “I bought this before Elon went crazy.” Even people are using images of Musk in a Nazi salute to protest against his political affiliations. As controversy surrounds Musk, investors worries about his leadership, contributing to a 30% drop in Tesla’s stock value since the start of 2025.
Despite all these blacklash, Tesla is all set to expand production of its new Model Y SUV in April. According to some analysts, the recent dip in sales could be a temporary blip, as they expect a comeback of Tesla’s top-selling Model Y.
However, with increasing competition from Chinese and European EV manufacturers, along with increasing political opposition, Tesla has a steep hill to climb to regain its reputation and market leadership. The next several months will determine if the firm can recover or if its current path leads to a longer-term downturn.
