Tesla’s vehicle sales plummeted by 13% in the first quarter of 2025, marking the most significant drop in the company’s history.
The electric vehicle giant delivered 336,681 cars between January and March, nearly 50,000 fewer than in the same period last year.
This decline underscores growing challenges for Tesla, including increasing competition and backlash against CEO Elon Musk.
The company has been facing protests outside its showrooms due to Musk’s leadership role in the Department of Government Efficiency and his association with President Donald Trump’s administration.
Vandalism targeting Tesla facilities and vehicles has also been reported, potentially discouraging prospective buyers.
However, Tesla did not acknowledge these issues in its statement, instead attributing the production halt at all four factories to Model Y updates as a factor in the decline.
Market analysts had anticipated a weak first quarter for Tesla, but the 336,681 deliveries fell even below their lowest estimates of 350,000.
The company’s stock, which surged following the presidential election on expectations of favorable policies, has since dropped by 44% from its peak in December. Following the sales report, Tesla shares fell by another 2% in early trading.
Analysts warn that Musk’s controversial statements and social media activity are damaging Tesla’s brand. Dan Ives of Wedbush Securities labeled the situation a “brand tornado crisis,” suggesting that Musk must navigate this challenging period carefully. Polls indicate Tesla is losing favor, particularly among liberal consumers, a key demographic for EV purchases.
Tesla’s troubles extend beyond the U.S. In Europe, sales fell 49% in the first two months of 2025 despite overall EV sales growing by 28%. In China, the world’s largest EV market, competitor BYD outpaced Tesla with 416,000 sales, a 39% increase year-over-year. With Tesla’s market share slipping globally, 2025 could be a pivotal year for the company’s future in the EV industry.
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