Tesla, once the undisputed leader in the electric vehicle (EV) market, is facing a storm of challenges that extend beyond the controversy surrounding its CEO, Elon Musk.
While Musk’s political views and recent role as head of the Department for Government Efficiency (DOGE) have sparked backlash, Tesla’s struggles go deeper, with declining sales, outdated models, and intensifying global competition.
The controversy surrounding Musk has led to protests against Tesla across multiple countries, with some incidents escalating into vandalism and arson. The company’s Cybertruck, in particular, has become a target for anti-Musk sentiment. Meanwhile, former Tesla supporters like Ben Kilbey, a sustainability advocate, are distancing themselves from the brand, citing Musk’s polarizing actions and rhetoric.
Despite the public outcry, Musk retains significant backing from political figures like former President Donald Trump, who has publicly defended Tesla and condemned the attacks on its facilities as “domestic terrorism.” However, the real test for Tesla is not political but financial—sales have begun to slide for the first time in more than a decade. In Europe, registrations fell by 45% in January, while shipments from Tesla’s Chinese factory dropped by nearly 50%.
Wall Street has taken note of the downturn. A UBS research report in early March predicted a 5% drop in Tesla’s sales for 2025, a stark contrast to market expectations of 10% growth. This led to a sharp decline in Tesla’s stock price, which has fallen 40% since the start of the year. Analysts suggest that Musk’s political activities are alienating potential customers, particularly in markets like the EU and Canada.
Tesla’s once cutting-edge vehicle lineup now looks stagnant compared to newer offerings from rivals. The Model S, first launched in 2012, and the Model X from 2015 are aging, while the more affordable Model 3 and Model Y face stiff competition. Hyundai, Kia, and emerging Chinese brands like BYD are producing high-performance EVs at competitive prices, with BYD even unveiling a fast-charging system that outpaces Tesla’s Supercharger network.
Musk has shifted Tesla’s focus toward autonomous driving, claiming that a fleet of robotaxis will launch in Texas by mid-2025. However, his promises have been met with skepticism, given his repeated delays in delivering self-driving capabilities. Tesla’s current “Full Self-Driving” package remains a driver-assistance system rather than a fully autonomous solution.
The company is also grappling with concerns about Musk’s divided attention. In addition to running Tesla, he oversees SpaceX, the AI firm xAI, and social media platform X, raising doubts about his ability to manage Tesla’s growing challenges. Musk himself admitted in a recent interview that balancing his various ventures is “difficult.”
Investors are beginning to question whether Tesla can thrive with Musk at the helm. Although Tesla’s stock remains significantly higher than it was a year ago, its valuation is based on the assumption of continued technological breakthroughs. Analysts warn that with Chinese manufacturers dominating the EV space and Tesla struggling to launch new models, the company’s future growth is uncertain.
Some investors are calling for leadership changes. Ross Gerber, a long-time Tesla shareholder, has openly suggested that Musk should step down as CEO. Other experts argue that Tesla needs a leader with deep automotive industry experience to refocus the company and develop a more competitive strategy.
For now, Musk’s grip on Tesla remains firm. As the company’s largest shareholder, he holds a 13% stake, making any leadership change unlikely without significant investor pressure. However, with sales declining, competitors gaining ground, and controversy swirling, Tesla may soon face a reckoning that even Musk’s larger-than-life persona cannot deflect.
