Tesla’s first-quarter delivery figures have revealed a stark downturn, with global sales plummeting 13% year-on-year to 336,681 vehicles, a decline analysts attribute to CEO Elon Musk’s deepening alliance with US President Donald Trump, according to Politico.
The electric vehicle (EV) giant now faces a “crisis tornado”, as Wedbush Securities analyst Dan Ives termed it, driven by political backlash, protests, and a widening ideological divide among consumers.
Musk’s role as head of Trump’s Department of Government Efficiency (DOGE), where he has overseen sweeping federal workforce cuts and agency closures, has enraged liberal voters, a demographic historically pivotal to Tesla’s success. Over 53% of liberals now report being less likely to buy a Tesla, according to market research firm Escalent, whereas conservative interest remains tepid despite Trump’s endorsements.
European sales dropped 43% in January–February 2025, even as overall EV sales rose 30%. Moreover, 57% of French consumers plan to boycott Tesla and other US brands over Musk’s political ties. Used Tesla listings also surged to 1.4% of the US used-car market, up from 0.4% a year earlier.
Protests have further dented the brand. Activists vandalised vehicles, set charging stations ablaze, and staged demonstrations at 277 Tesla dealerships globally on 29 March, with signs like “Don’t buy a Swasticar” referencing Musk’s controversial gestures.
Trump’s tariffs: double-edged sword
While the Trump administration’s 25% tariffs on imported vehicles may disadvantage Tesla’s rivals, analysts warn the move fails to address the company’s core crisis. Tesla’s US-made cars avoid tariffs, but Musk admitted the policy would raise costs for imported components like Chinese lithium-ion batteries.
The administration’s overt support, including Trump’s public Tesla purchase on the White House lawn and Commerce Secretary Howard Lutnick’s stock-buying plea on Fox News, has further politicised the brand. Ives noted such actions turned Tesla into a “political lightning rod”, alienating environmentally conscious buyers.
Meanwhile, major Tesla investor Ross Gerber lambasted Musk’s leadership, declaring the “brand is broken” and demanding a “real CEO”. Internal tensions flared as board members and executives sold shares amid Musk’s assurances to employees, causing stock volatility. Despite a brief 12% rally post-all-hands meeting, shares remain 36% below pre-inauguration levels.
Musk’s political missteps also compounded the turmoil. His $20 million investment in Wisconsin’s Supreme Court race backfired spectacularly, with conservative candidate Brad Schimel losing by 10 points. Democrats framed the contest as “The People vs. Elon Musk”, leveraging his polarising image.
Tesla’s challenges underscore the risks of conflating corporate leadership with partisan politics. While Trump’s tariffs may temporarily buoy Tesla by disadvantaging competitors, the company’s long-term recovery hinges on repairing its brand image and re-engaging disillusioned customers.
