Tesla's Tumultuous Ride: Brand Woes and Political Ties Impact Sales

Tesla faces a challenging year as brand damage and political controversies, especially CEO Elon Musk's ties with far-right politics and U.S. administration, lead to sales declines. Investors anticipate further drops ahead. The company is focusing on delivery volumes amid its cheaper model rollout plans.

Tesla is grappling with significant setbacks as it faces its first-ever sales decline amid brand damage concerns. CEO Elon Musk's association with controversial political figures has sparked protests and tarnished Tesla's previously strong market position. Consequently, the electric vehicle giant reported a significant 13% drop in quarterly deliveries, marking the weakest performance in almost three years.

Investors and analysts are now bracing for a potential further decline in Tesla's sales this year. Industry expert Gene Munster pointed to the recent brand damage as a primary reason for the decline, forecasting lower delivery numbers throughout 2025. The competition continues to mount, particularly in China, where rivals like BYD challenge Tesla's market share.

Tesla's introduction of the refreshed Model Y aims to rectify sales challenges, with deliveries commencing in China. However, Deutsche Bank analysts predict a 5% sales drop this year, contingent on the rollout of Tesla's anticipated cheaper vehicle model. As pressure mounts, the impact of Musk's controversial political engagements remains uncertain, adding further risks to Tesla's future performance.

(With inputs from agencies.)