Tesla faces crisis as vehicle sales plummet amid executive turnover

In July 2025, Tesla, an American electric vehicle company, experienced significant challenges impacting its operations and leadership. The drop in sales marked the largest in the company's history, with a 13.5 percent decline reported in global vehicle sales during the second fiscal quarter. Contributing factors included the adverse effects of CEO Elon Musk's political activities and his limited focus on the company, which led to increasing concerns among investors and analysts regarding Tesla’s future. The company's stock value also saw a sharp decrease, falling from around $413 per share in January 2025 to approximately $308 by mid-July 2025. The turmoil within Tesla was exacerbated by the departure of several top executives, including Troy Jones, vice president of sales, service, and delivery in North America, who resigned after 15 years with the firm. Milan Kovac, another critical figure overseeing engineering and the development of Tesla's humanoid robot Optimus, also announced his departure following nearly a decade with the company. The leadership shakeup coincided with increased scrutiny over Musk’s focus on external projects and political engagements, which were seen as detracting from his management responsibilities at Tesla. In addition to executive turnover and declining sales, the company faced regulatory challenges, notably changes in tax credits for electric vehicle buyers introduced by Congress. These changes included removing the $7,500 tax credit, which raised further concerns among investors about future demand and profitability. Analysts emphasized the need for a dedicated leadership approach to navigate these challenges effectively and urged the board to impose restrictions on Musk's political engagements to ensure he dedicates time to Tesla. Despite these difficulties, some Tesla supporters remained hopeful, focusing on future projects like the rollout of the robotaxi service and advancements in artificial intelligence. However, doubts persisted about Musk's commitment to the core automotive business as the company struggled to maintain market share in an increasingly competitive landscape of electric vehicle manufacturers. The combination of these elements cast a shadow over Tesla's prospects as it faced one of the most crucial periods in its growth cycle.