Tesla reported a 13% drop in vehicle deliveries for the first quarter of 2025, the sharpest year-on-year decline in the company’s history, as mounting political backlash and rising competition put pressure on the EV giant.
The company delivered 336,681 vehicles in the first three months, down from nearly 387,000 in the same period last year.
The drop, blamed partly on a temporary production halt due to Model Y updates, came amid protests against CEO Elon Musk’s political affiliations and economic policies under US President Donald Trump.
Tesla’s stock, which had already fallen 11% this year, slid nearly 8% in after-hours trading before rebounding on reports that Musk may step down from his role in the White House’s Department of Government Efficiency.
The shares ultimately closed 5% higher.
Musk’s ties to the Trump administration have sparked protests, boycotts and vandalism at Tesla facilities worldwide. Critics, including public officials and institutional investors, say Musk’s growing political role has distracted from his corporate responsibilities and damaged the brand’s image, particularly among environmentally conscious buyers.
Sales in Europe dropped 49% in the first two months of the year, according to the European Automobile Manufacturers’ Association, even as overall EV sales on the continent rose. Analysts attribute the slump in part to Musk’s vocal support for far-right political parties in Germany and the UK.
Competition from China also continues to squeeze Tesla. Chinese EV maker BYD sold over 416,000 pure electric vehicles in the same quarter, a 39% rise year-on-year, surpassing Tesla once again in global sales. Tesla still leads in full-year numbers, but analysts say that could change by the end of 2025.
Tesla’s ability to navigate supply chain challenges is further complicated by Trump’s newly announced global tariffs, which target key production hubs in China and Mexico. The administration’s reciprocal tariff regime imposes a 34% levy on Chinese goods, pushing total tariffs to 54% — a direct hit to Tesla’s supply chain.
However, Tesla shares climbed over 5% on Wednesday following a report that CEO Elon Musk may be planning to exit his White House advisory role, potentially refocusing his attention on the electric vehicle manufacturer.
The Politico report, citing insiders within President Donald Trump’s circle, suggested Musk could soon leave his position at the Department of Government Efficiency (DOGE), ending a high-profile 130-day stint as a special government employee.
A senior official confirmed to NBC News that Musk’s exit was being discussed, while Trump reportedly told Cabinet members that Musk would return to his private businesses. The news offered a brief reprieve to Tesla investors following weeks of losses.
The White House later dismissed the reports as “garbage,” and Musk posted on X, formerly Twitter: “Yeah, fake news.”
Despite the denial, the market reacted positively. Tesla stock had dropped as much as 6.4% earlier in the day after reporting weaker-than-expected first-quarter deliveries. The stock closed up 5.3%, recovering some of its recent losses.
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