AUSTIN, USA – Tesla’s vehicle deliveries fell sharply in Q1 2025, marking the electric vehicle giant’s worst quarterly performance in nearly three years. The 13% drop, totaling just 386,810 cars, comes amid intensifying political controversy surrounding CEO Elon Musk and growing global competition, especially from rivals like China’s BYD.
With Tesla’s brand image increasingly entangled in political fallout and consumer sentiment shifting, analysts warn the company is entering one of its most turbulent chapters yet.
The electric vehicle (EV) maker reported on Wednesday, April 2, 2025, that it delivered 386,810 cars worldwide between January and March, down from 436,681 during the same period last year.
The drop of nearly 50,000 vehicles marked Tesla’s weakest quarterly performance in almost three years.
The slump comes amid rising protests and vandalism targeting Tesla, largely due to Musk’s high-profile involvement in Donald Trump’s presidential administration, where he serves as head of the Department of Government Efficiency.
Demonstrations have taken place outside Tesla showrooms, and there have been reported incidents of damage to Tesla’s charging infrastructure and vehicles — a wave of unrest that may have deterred prospective buyers.
While the company did not acknowledge the protests in its earnings release, it cited a temporary production halt linked to an update to the Model Y as a contributing factor.
All four of Tesla’s factories underwent pauses in manufacturing during the quarter.
“Thank you to all our customers, employees, suppliers, shareholders and supporters who helped us achieve these results,” the company stated, without elaborating on the shortfall.
Market Reaction and Share Performance
Tesla’s stock (TSLA), which had surged following last year’s presidential election on speculation that Musk’s political connections would boost the company’s fortunes, has since reversed course.
Shares dropped roughly 2% in early trading Wednesday, extending a broader downturn that has seen Tesla’s value fall 44% since peaking in December.
Analysts expressed concern over the direction of the company under Musk’s leadership.
“The Street and us knew a bad 1Q was coming but this was even worse than expected,” wrote Dan Ives, a long-time Tesla analyst at Wedbush Securities.
“This quarter was an example of the damage Musk is causing Tesla. This continues to be a moment of truth for Musk to navigate this brand tornado crisis and get onto the other side of this dark chapter for Tesla.”
Eroding Brand Perception
Polling data reflects a widening gap in public sentiment around Tesla and its CEO.
A CNN survey conducted in March revealed that only 35% of Americans view Musk favourably, with 53% holding a negative opinion.
The figures place Musk as more widely known and more unpopular than Vice President JD Vance.
That dissatisfaction appears to be bleeding into perceptions of Tesla, particularly among politically liberal Americans — a demographic historically drawn to environmentally friendly products like EVs.
A February poll by Morning Consult found that 32% of US car buyers “would not consider” a Tesla, up from 27% a year prior and nearly double the 17% recorded in 2021.
Meanwhile, data from S&P Global Mobility shows diverging trends in customer loyalty.
In “blue states” — those that supported Democratic presidential candidates in the past four elections — repeat Tesla purchases dropped from 72% in 2023 to 65% by the end of 2024.
By contrast, repeat purchases in “red states” rose marginally from 47.6% to 48.2%.
International Setbacks and Rising Competition
Tesla’s challenges have been compounded by declining performance in overseas markets.
Although the company does not disclose regional sales figures, the European Automobile Manufacturers’ Association reported a 49% drop in Tesla deliveries across Europe during January and February, even as overall EV sales on the continent surged by 28%.
Industry observers attribute Tesla’s European dip not only to operational hiccups but also to political discontent with Musk, who has voiced support for far-right parties in countries including Germany and the United Kingdom.
In China — Tesla’s second-largest market after the US — local rivals are applying further pressure.
BYD, China’s largest EV producer, sold more than 416,000 pure electric vehicles in the quarter, marking a 39% year-on-year increase.
That once again pushed BYD ahead of Tesla as the world’s top EV seller on a quarterly basis.
Although Tesla has typically reclaimed the lead over the full calendar year, analysts warn the balance could shift permanently in 2025 if current trends persist.
BYD’s vehicles are typically more affordable than Tesla’s and now benefit from cutting-edge innovations, such as a recently unveiled charging system that delivers 250 miles of range in just five minutes.
Most Chinese EV brands, including BYD, do not currently sell in the US, limiting their immediate impact on Tesla’s domestic market.
However, the rising tide of international competition is forcing Tesla to contend with thinner margins and a need to rekindle demand at home and abroad.
Outlook
As Tesla enters the second quarter of 2025, its leadership is under growing scrutiny — both for business performance and political entanglements.
Analysts and shareholders alike are watching closely to see whether Musk can steady the company through what some have described as a self-inflicted storm.
“This is not just about competition anymore,” one analyst noted. “It’s about brand integrity and leadership — and whether Tesla can rise above the noise.”
