With sinking sales and market share, a preoccupied and polarizing CEO, and vandalization of customer cars spreading, the question matters.
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It wasn’t that long ago that the biggest concern about Tesla’s future was that its four core products were getting long in the tooth and its CEO was criticized for spending too much time on his other businesses such as X (formerly Twitter), SpaceX, and others. But Elon Musk’s fan club and loyal customer base were largely intact, and Tesla having a plant in China, the largest auto market in the world, seemed to guarantee growth and money in the bank.
Musk’s newfound status as first buddy and future official cleaver-of-government to now-President Donald Trump only seemed to cement soaring fortunes for Tesla with expectations that future policies would improve Tesla’s business environment in the immediate aftermath of the 2024 election season.
Fast forward to today. Tesla’s products are still old, comparatively speaking, in an industry that constantly hits the refresh button. The Model S has been around for 13 years, with only minor updates, but that could change later this year. The big shiny new model, the Cybertruck, is not selling as anticipated; only a fraction of the 1 million reservation holders bought one. It has also suffered quality issues and recalls, forcing Tesla to pivot from markups to discounts, and it has depreciated by about 58 percent on the used market. Pre-owned Teslas in general have seen their prices fall at more than double the rate of the average car, according to CarGurus. Trade-ins of used Teslas have also jumped, big time, according to Reuters.
The entry-level Model 3 sedan received a significant (and effective) update last year, but sales in the key state of California have been plunging, where the 3 has fallen from second to fourth place in EV sales. Still at the top is the Model Y crossover, which gets a similar refresh for the 2026 model year (pictured below).
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There are plans for a stripped-down, lower-cost Model Y to be built in Shanghai in 2026 for the domestic market, to address sales that were down 49 percent in February (this in a market that accounts for almost a quarter of all Tesla sales). The cheaper model will eventually be produced in Europe and North America. Tesla’s success in China is in question against the competition, which has comparable vehicles at a lower price point with more advanced technology. Tesla has yet to receive approval for its Full Self Driving software in China while others have Level 3 self-driving systems on the road. At least one company, Zeekr, has said it will offer its self-driving system for free. Musk has long said driverless vehicles are key to Tesla’s future. Tesla also falls behind in charging. Chinese automaker BYD has unveiled a new fast-charging system that will add 250 miles of range in five minutes, which is twice as fast as charging a Tesla. It all amounts to concerns that Tesla sales in China will be cut in half this year.
As for new models in the pipeline, the focus is on the allegedly autonomous Cybercab, so nothing big for retail customers to look forward to.
Tesla global sales fell in 2024 for the first time since 2015, and the forecasts for this year are not good. In the U.S., overall EV share continues to increase while Tesla sales are in decline. Sales are also down in Europe. Analysts are already forecasting Tesla global sales to fall this year.
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The limp product pipeline is only part of the reason for sagging sales. There were concerns Musk was not paying enough attention to Tesla, given his myriad other businesses, including SpaceX and X. His aerospace company has suffered setbacks with a series of delays, fires, failures to land, and explosions. X has lost viewers, revenue, and value since Musk acquired it and renamed it from Twitter.
And that was before the politics. Musk’s right-hand-man status to Trump and his oversight of the contentious Department of Government Efficiency (DOGE), which has resulted in massive job losses and cuts to agencies and government spending, have led to blowback. Tesla owners who don’t agree with his politics or actions are slapping bumper stickers on their vehicles to say they made their purchase when it was cool and Musk was viewed as an environmental evangelist. Some are now selling their vehicles, fearing retribution. Such retribution has been happening: Anything with a Tesla logo has become a rallying point for protest. Tesla vehicles, chargers, dealerships, and facilities have been vandalized and set on fire. Tesla was removed from an auto show in Canada, citing safety concerns. In the U.S., incidents of vandalism are being investigated by Trump’s Justice Department as domestic terrorism.
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Then there was the gesture Musk made on stage at a political event, which many read as a Nazi salute. It fostered memes and billboards denouncing Musk. The blowback was particularly strong in Germany, where Tesla has an assembly plant and nods to Nazism are illegal. Sales in Germany have fallen off a cliff, down 76 percent in February.
Tesla stock has fallen more than 50 percent since December, plummeting to about $230 per share from a 52-week high of $488.54. Insiders and board members are among those dumping their stock amid one of the worst corporate losses on the S&P 500. “We struggle to think of anything analogous in the history of the automotive industry, in which a brand has lost so much value so quickly,” JPMorgan said in a recent analyst note. Musk is even begging people not to sell their Tesla stock. (Trump’s commerce secretary made similar pleas on TV recently, as well.)
Tesla’s wealth is largely based on what the company might do in the future, and that stems from the mind and charisma of its powerful CEO. When Musk was viewed favorably by many, Tesla was valued at $1.2 trillion, worth more than the next 20 largest automakers combined, and Musk was on track to become the first trillionaire. Now that the CEO and his models wear some taint, their value has taken a divebomb and are not forecast to rebound any time soon. That’s a tough spot to land in when you consider Tesla’s actual financials and revenue, particularly given the anticipated regulatory environment going forward, in which President Trump has signaled an intent to do away with EV tax credits and change the fuel economy regulations that encourage automakers to produce EVs (and spawned the environmental credit trading that brings all-electric automakers such as Tesla a ton of revenue from selling EV credits to companies with less efficient fleets). While the tax credit’s erasure might hurt other automakers more than it hurts Tesla, if the credit system goes away, it’ll take with it a notable chunk of Tesla’s revenue—$692 million last quarter alone.
Trump’s odd March 11 White House event hawking Teslas alongside Musk hasn’t brought a meaningful bump in sales, either, even as some right-wing figures (Trump included) have publicly declared their intent to purchase new Tesla vehicles in support of Musk and Trump. It does bring Tesla’s appeal into a sort of upside-down existence, in which those on the side of the political aisle who’ve traditionally pooh-poohed EVs are suddenly in support of them, or at least Tesla-branded ones. But these moves, along with the stock hyping by administration officials and attorney general Pam Bondi’s labeling of Tesla vandalism as domestic terrorism, reek of desperation—and worse for Tesla, none of its seems like a viable way out of this rut. New product and the company’s CEO not alienating half of potential customers seem like better options.