Tesla investors fear massive sales drop as Elon Musk’s political ties spark outrage
Tesla’s future looks shaky amid Musk’s controversial political stance (Illustrative photo: Getty Images)
Tesla investors are anticipating a decline in global demand due to public outrage over Elon Musk’s political activities, reports The Guardian.
This week, Tesla is set to release first-quarter delivery data for 2025, which analysts predict will be significantly lower than the same period last year.
The expected number of vehicles delivered ranges from 355,000 to 360,000, marking a 7% decrease compared to the previous year. Initial forecasts from Wall Street had predicted around 400,000 vehicles.
Dan Ives, managing director at Wedbush Securities and a self-proclaimed Tesla supporter, attributes the drop in sales to a "brand crisis" caused by Musk's political involvement.
"Approximately 30% of the anticipated decline is linked to reputational damage due to Musk’s involvement with the Department of Government Efficiency (Doge)," said Ives. This advisory body, focused on federal cost-cutting, has negatively impacted Tesla’s brand image.
Model updates and tariff challenges
Another reason for the sales slowdown is the delayed update of the popular Model Y, which customers expect to see this summer. The US remains Tesla’s largest market, but many buyers are postponing their purchases while waiting for the refreshed version.
Sales are also being affected by tariffs introduced by the Trump administration. The president announced a 25% tax on foreign-made cars, which impacts Tesla despite its US-based production, as some parts are imported. Musk stated on his platform X that Tesla has "not escaped" the tariff’s impact: "The tariff impact on Tesla is still significant."
The combination of declining demand and tariff risks could pose serious challenges to Tesla’s financial performance if the situation does not improve soon.
