April 02, 2025
Tesla’s stock plunged 36% in the first quarter, erasing approximately $460 billion in market value as CEO Elon Musk’s political involvement, rising global competition, and a weakening EV market rattled investor confidence. Analysts predict Tesla’s car deliveries will hit a one-year low when the company releases its latest figures today.
Tesla’s sales have taken a hit both domestically and internationally, with European sales plummeting 49% in the first two months of the year following Musk’s endorsement of Germany’s far-right Alternative for Germany (AfD) party. In contrast, overall EV sales in the European Union grew by 28.4%, reaching a 15.2% market share, according to the European Automobile Manufacturers’ Association (ACEA).
The decline is even sharper in China, where Tesla’s shipments fell to 30,688 in February—down 49% year-on-year—while new energy vehicle sales in the country surged 82% to 840,000 units, per the China Passenger Car Association (CPCA). Meanwhile, Tesla’s US sales remained steady, and the company is expected to be largely unaffected by Trump’s planned auto tariffs since its vehicles and components are produced domestically.
Musk, who currently holds a government position as the head of the Department of Government Efficiency (DOGE), acknowledged the impact of his role, stating at a Wisconsin town hall event, “It’s costing me a lot to be in this job.” President Donald Trump recently suggested that Musk may soon return to Tesla full-time, fueling speculation about the company’s future direction.
As Tesla navigates political backlash, declining sales in key markets, and fierce competition from Chinese automakers, the company faces mounting pressure to restore investor confidence and sustain its growth trajectory in the evolving EV landscape.
Musk’s role in cutting thousands of federal jobs has sparked backlash against Tesla, with reports of vandalism targeting showrooms and charging stations in recent weeks.
A Bloomberg survey now estimates Tesla will deliver 390,000 vehicles in the first quarter, a significant drop from Wall Street’s earlier projection of 460,000. If accurate, this would mark Tesla’s lowest quarterly delivery figure in a year. While Tesla’s first-quarter sales have historically dipped due to seasonal factors, the company also temporarily halted part of its Shanghai production for about three weeks during the Chinese New Year to upgrade its Model Y production lines. However, if the current downward trend continues, Tesla may struggle to achieve Musk’s target of year-on-year growth in 2025.
Rising Competition from Chinese EV Makers
Tesla faces mounting competition from Chinese automakers, particularly BYD, which has steadily eroded its market share.
In 2024, BYD reported an annual revenue of 777 billion yuan (€99 billion), a 29% year-on-year increase, surpassing Tesla’s revenue of just over €90 billion. While Tesla sold 1.79 million EVs last year, BYD wasn’t far behind at 1.76 million. However, BYD’s hybrid vehicle sales significantly outpaced Tesla’s, reaching 4.3 million units globally.
Further intensifying competition, BYD recently launched its Super e-Platform technology, enabling EV batteries to charge in just five minutes for a 400-kilometer driving range. Additionally, the company announced a partnership with DeepSeek to enhance its autonomous driving capabilities. The news unsettled Tesla investors, leading to a sharp selloff in its shares. While BYD’s stock has surged 48% this year, Tesla’s shares have plunged 31%, reflecting growing concerns about the company’s ability to maintain its competitive edge in the rapidly evolving EV market.
(Source)