Tesla, the iconic electric vehicle brand, has experienced a significant drop in sales across several key global markets. According to recent data, the company has seen alarming declines in regions such as Europe, Australia, China, and the United States, sparking concern among investors and analysts.
This downturn comes amid rising competition in the electric vehicle sector and a series of controversial decisions by CEO Elon Musk, which may be impacting Tesla’s core customer base.
Declining sales in Europe
In Europe, Tesla deliveries have dropped by 50% compared to the previous year. In Germany, the largest EV market in Europe, the numbers are even more concerning. In February 2025, Tesla delivered only 1,429 vehicles, down from over 6,000 in February 2024, a staggering 76% drop.
This decline coincides with Musk’s public endorsement of the far-right German party AfD, which has sparked backlash and alienated European consumers. The political controversy surrounding Musk is seen as one of the factors eroding Tesla’s reputation among its traditional customer base, which has largely been progressive and eco-conscious.
Impact of Musk’s political connections
Musk’s connections with polarizing political figures have also contributed to the company’s woes.
His ties with the Trump administration and involvement in initiatives like the Department of Government Efficiency (DOGE) have upset progressive consumers who have been some of Tesla’s biggest supporters.
This has caused some to reconsider their allegiance to the brand, shifting away from the image of Tesla as an innovative and sustainable alternative to traditional automakers.
In the United States, particularly in California — the largest EV market in the country — Tesla has also experienced a sales drop.
Data from the California New Car Dealers Association shows a 12% decrease in Tesla registrations in 2024 compared to the previous year, attributed to both intensifying competition and the negative perception surrounding Musk.
Rising competition and challenges in key markets
Beyond the controversies surrounding Musk, Tesla is facing fierce competition in the electric vehicle sector. Established automakers such as Volkswagen and General Motors have significantly expanded their electric vehicle offerings, while emerging companies like China’s BYD are rapidly gaining market share.
In China, Tesla saw a 49% drop in sales of locally produced vehicles in February 2025, according to preliminary data from the China Passenger Car Association. Meanwhile, BYD reported a 161% increase in its wholesale sales during the same period.
Analysts have cited disruptions in Tesla’s production lines in Shanghai as a contributing factor, but the growing preference for local Chinese brands is also playing a role.
In Australia, the situation is similarly bleak. Tesla sold only 1,592 vehicles in February 2025, a 72% drop from the 5,665 vehicles sold in the same month of the previous year. This decline reflects a broader contraction in the Australian electric vehicle market, where EVs represented only 5.9% of total car sales in February, down from 9.6% the year before.
Consumer and investor reactions
The impact of these declining sales goes beyond the numbers. According to The New York Times, some Tesla owners have chosen to sell their vehicles due to the company’s association with Musk’s political stances.
This shift reflects a changing public perception of Tesla, which was once seen as a symbol of innovation and sustainability but is now facing criticism for aligning itself with controversial political figures and movements.
Investors are also expressing concerns. Randi Weingarten, president of the American Federation of Teachers (AFT), sent a letter to Tesla’s major institutional shareholders warning of the risk of the company’s devaluation.
“Many of our members rely on their investments in Tesla to ensure their long-term financial security,” Weingarten noted, emphasizing the need to protect pension funds and other collective investment vehicles.
Looking ahead for Tesla
Despite the current challenges, some analysts remain optimistic about Tesla’s future. A Morgan Stanley report cited by Investing.com suggests that the company could still benefit from its leadership in emerging technologies such as autonomous vehicles and AI-powered robotics.
However, Tesla’s long-term success will depend on its ability to regain consumer trust and adapt to an increasingly competitive market. How the company responds to these challenges and whether it can recover from its current struggles remains to be seen.