Tesla struggles as sales plummet amid Musk's political controversies

In the second quarter of 2025, Tesla experienced a significant 13% drop in vehicle deliveries, selling 384,122 cars, compared to 443,956 in the same period the previous year. This decline marked the worst year-over-year drop in Tesla's history, raising concerns about the company's brand appeal amid growing competition and increasing backlash against CEO Elon Musk due to his political involvement. Analysts noted that while sales of models 3 and Y met or slightly exceeded predictions, the overall downward trend was alarming, especially given external market pressures from new entrants into the electric vehicle sector. Elon Musk's involvement in politics, particularly his earlier affiliations with Donald Trump and far-right European politicians, appears to have severely impacted consumer sentiment and brand loyalty, leading to protests at Tesla showrooms and even vandalism of the company's products. Analysts suggested that this backlash coincided with a decline in U.S. and European sales, which have faced heightened competition not only from traditional automakers but also from emerging players, particularly from China. Despite these challenges, Tesla reported a modest increase in sales compared to the previous quarter, revealing a 14.1% rise over Q1 2025. Internal changes within the company included Musk taking direct control of sales in the U.S. and Europe after the dismissal of a senior executive, further emphasizing the seriousness of the situation amid declining consumer interest. Looking ahead, the company is positioned to unveil its Q2 earnings on July 23, where analysts anticipate a drop in both revenue and profit margins. This upcoming report, combined with the existing pressures from competition and brand image issues, puts Tesla at a critical juncture as it navigates its future strategy in the rapidly evolving electric vehicle market.