Tesla's profits plummet amid political backlash against Elon Musk

In the United States, Tesla experienced significant financial challenges in the first quarter of 2025, largely attributed to the backlash against CEO Elon Musk's involvement in the Trump administration. The company reported a 71% drop in net income year-over-year, with total revenue declining by 9%. These financial troubles coincided with public protests against Musk, which affected the brand's reputation and led to sluggish sales, marking the first year-over-year sales decline in over a decade. Tesla's vehicle deliveries also declined by 13%, reaching their lowest point in three years. Despite maintaining a strong domestic supply chain in the face of global competition, the company warned about the potential impact of ongoing trade wars and tariffs, particularly those stemming from U.S.-China relations. Analysts suggested that changing political sentiments and increased competition from companies like BYD in China could further jeopardize Tesla's sales and market position. The firm's previous rapid growth had shielded it from such sharp declines, emphasizing the severity of the current situation. While Musk indicated a shift in focus away from governmental responsibilities back to Tesla, uncertainty loomed about the future revenue streams from new product launches, including a new affordable Model Y and the anticipated robotaxi service set to roll out in Austin, Texas. Although Tesla has pledged to adjust its strategy to address the challenges posed by tariffs and competition, skepticism among investors remains high due to the substantial declines in both revenue and profits. The broader economic conditions, including trade policy fluctuations and consumer demand, continue to cause additional uncertainty for Tesla. As the electric vehicle market enters a new phase of competition, Tesla must navigate these challenges while rebuilding its public image and maintaining operational growth amidst external pressures.