Tesla CEO Elon Musk boards Air Force One in Morristown, N.J., on March 22. Even if Mr. Musk’s once-loyal detractors eventually forget his political dalliances and embrace Tesla again, that is no guarantee the company can rebound.Nathan Howard/Reuters
Gus Carlson is a U.S.-based columnist for The Globe and Mail.
Elon Musk’s decision to cut back on his commitment to U.S. President Donald Trump last month and pay more attention to Tesla TSLA-Q could not have come at a better time for the troubled market leader in electric vehicles.
The questions now are whether the Tesla founder’s move is too little, too late to meet the rapidly rising competitive threat from Chinese EV-makers, and will his once-faithful but increasingly angry customer base eventually forgive and forget his widely unpopular foray into the world of partisan politics?
The answers will determine whether Mr. Musk’s return to the office in Austin, Tex., after months in the spotlights at the White House and Mar-a-lago will pull Tesla Inc. out of a tailspin that has put its global dominance at risk.
News out of Europe this week seems to confirm the time-worn adage that politics and commerce can be a toxic mix, with Tesla sales in freefall across several markets.
The bad news – which includes a 62 per cent drop in Tesla registrations in Britain – follows the company’s report last month that U.S. sales fell more than 20 per cent in the first quarter of 2025 compared to a year ago.
Most concerning for Tesla: its sales declines come at a time when demand for EVs remains relatively healthy. In the U.S., for example, overall EV sales rose 11 per cent during the first quarter of this year, according to Cox Automotive. About 7.5 per cent of all new vehicles sold during the period were EVs.
There is no question Tesla’s problems are linked closely to Mr. Musk’s unpopularity as a close adviser to Mr. Trump and the de facto head of the controversial new Department of Government Efficiency, or DOGE, which has made sweeping job cuts across a wide spectrum of U.S. federal agencies.
Global protests against the Trump-Musk alliance have been violent. Tesla vehicles have been vandalized and set on fire. Some Tesla owners have been the subject of criticism by Mr. Musk’s detractors, and some seeking to sell their vehicles have found prices for used Tesla’s depressed by the bad publicity.
The public relations nightmare reflects a sharp and somewhat hypocritical turnaround in partisan sentiment toward the company, once considered the darling of the progressive green movement for its pioneering leadership in EV.
While it’s true that Musk-haters can take some credit for damaging the company’s cars and its market value, there are other perhaps more fundamental factors driving Tesla’s decline.
Some of those are self-inflicted. The company has been criticized for being slow to evolve its model line. Its new Model Y has been a long time coming to market, and the transition has been slow, hampered by production slowdowns.
The stripped-down vehicle, priced about 20 per cent lower than the current version, was scheduled to launch in the first half of 2025. But the launch has been pushed to the third quarter of this year or early next year, with a U.S. sales target of 250,000 units. The company has been coy about the delay beyond suggesting it is not uncommon in any model switchover.
Other internal issues include the Cybertruck, the futuristic-style vehicle introduced in 2023 and heralded by Mr. Musk for generating US$100 deposits from more than a million would-be buyers.
Aside from its polarizing looks – either you love it or hate it – the truck has been problem-plagued: regulators recalled more than 46,000 vehicles, a high-profile bombing of a truck made headlines in January, and the trucks have been popular targets of politically motivated vandalism.
The result: Cybertruck sales fell more than 50 per cent in the first quarter of 2025 compared to Q4 2024 sales, the second consecutive quarter of declines.
To be sure, bad publicity and internal tangles have rutted Tesla’s road forward. But there is a harsher reality: The EV market is catching up to Tesla, especially Chinese-made EVs.
The clues are everywhere in this week’s European sales reports. Tesla’s declines in Britain come as the Chinese EV maker BYD’s registrations soared over 650 per cent, to more than 2,500 vehicles.
The same was true in Germany, the site of Tesla’s only European factory, where Tesla sales fell 48 per cent in contrast to BYD sales increase of more than 750 per cent. Tesla’s sales were also down sharply in France, Denmark and Sweden.
Will Rogers, the U.S. cowpoke-turned-humorist, said famously that the short memories of the American voters is what keeps our politicians in office.
It seems that even if Mr. Musk’s once-loyal detractors eventually forget his political dalliances and embrace Tesla again, that is no guarantee the company can rebound.
Mr. Musk needs to get his house in order and be aggressive in rolling out new affordable models to meet the growing threat of cheaper Chinese competitors now flooding global markets and eating Tesla’s lunch.
