Tesla sales are collapsing worldwide, and Musk’s chaotic leadership and focus on political power plays are doing nothing to stop the downfall.
The start of 2025 has been troubling, particularly in Europe, where Tesla saw a 45% drop in new registrations in January compared to the same period in 2024, with further declines in February. While the sales rose by 21% in the UK and Australia, shipments of Chinese-made cars in China fell by more than 49%.
In March, a Wall Street analyst at Swiss bank UBS, Joseph Spak, published a research note predicting a decrease of 5% in Tesla’s sales around the world. Despite the 10% growth expectations, Spak’s forecast triggered a negative reaction in the stock market, causing Tesla’s share price to drop.
There can be many other reasons for the fall in Tesla sales. People working with Tesla already expected this drop as the company headed toward the launch of the new Model Y with customers waiting for the latest version.
However, research by Morning Consult Intelligence, a brand monitoring firm, says that Musk’s actions have harmed Tesla significantly in Europe and Canada. It also acknowledges the Chinese market remains crucial for Tesla’s success despite the backlash elsewhere.
In reality, the recent decline only wiped out a huge rally Tesla experienced right after the election, which nearly doubled its market valuation.
In the U.S., the situation seems a bit more complicated. Sure, a lot of consumers seem to be on board with DOGE cuts in government spending. But there’s a catch, “Musk may be turning off those US consumers most likely to buy a Tesla. Among high-income consumers who say they plan to purchase an EV in the future, Tesla now ranks lower compared with competitors than it did one year ago.”
Tesla’s problems go way beyond how the public views Musk.
Prof. Peter Wells, director of Cardiff University’s Centre for Automotive Industry Research told BBC “We’ve not seen the level of innovation in terms of the product range that perhaps Elon Musk should have been looking for. I think that is a big part of their problem.”
The competition is coming from all directions. Traditional carmakers have been pouring money into electric vehicles, with companies like Kia and Hyundai building a strong reputation for reliable, high-quality EVs.
Meanwhile, China is making serious moves. Brands like BYD are expanding rapidly by offering well-performing cars at affordable prices. And then you have higher-end players like Xpeng and Nio, which are all about luxury and advanced tech.
Judging from Musk’s comments during Tesla’s earnings calls, he seems much more focused on the robotaxi vision than anything else.
Back in January, he claimed Tesla would have a robotaxi service up and running in Texas by June. But skeptics were quick to respond, pointing out that Musk has been making these kinds of promises for years.
In 2019, he said that within a year, there would be a million Teslas on the road capable of working as robotaxis. Yet Tesla’s “Full Self Driving” package still requires drivers to keep their hands on the wheel and stay alert.
“Every year we get a new promise from Elon Musk about how his autonomous cars are just around the corner. The trouble is, they never seem to be able to find the corner to emerge from,” says Jay Nagley of automotive consultancy Redspy.
Tesla needs solid leadership, but Musk’s hands are clearly full.
Apart from running Tesla, Musk is also deeply involved in his social media platform X, artificial intelligence firm xAI, and SpaceX, which has had a couple of setbacks with its massive Starship rocket recently.
When Fox Business asked him how he was managing all these responsibilities, Musk admitted it was “with great difficulty.”
“It’s hard to tell exactly how much Tesla is hands-on managed nowadays by Musk,” says Prof. Wells.
“If he’s making the key decisions over things like product placing and where factories are built and so forth, then those decisions have to be correct. And I think you need someone with a hands-on, 100% commitment to understanding the automotive industry, and making those decisions correctly.”
Despite all this, Musk’s position at Tesla seems untouchable. He’s the company’s largest shareholder, owning about 13% of the stock, which is worth over $95 billion. That’s nearly the same amount held by investment giants Vanguard and Blackrock combined. Other financial players like State Street Bank and Morgan Stanley also have smaller stakes.
Sure, Tesla’s recent drop in share price probably wasn’t fun for those investors. But if you look at the big picture, the stock is still about 30% higher than it was a year ago. In reality, the recent decline only wiped out a huge rally Tesla experienced right after the election, which nearly doubled its market valuation.
Musk should hand over Tesla to new leadership.
Tesla is still valued at more than 100 times its earnings. That’s way higher than other car companies like Ford, General Motors, or Toyota. And the reason? Shareholders are still banking on Tesla’s technological breakthroughs and explosive growth.
For now, none of the big investors are calling for major changes. But Ross Gerber, a longtime shareholder who’s turned into one of Musk’s most outspoken critics, recently said Musk should step down.
Analysts tend to agree that a leadership change could be beneficial. “A new CEO for Tesla would without question be the best thing for the company right now,” says Matthias Schmidt of Schmidt Automotive Research.
“It would address the toxic contagion from Musk, offer a solution for the conflict of interest regarding his DOGE position, and allow a dedicated CEO to focus entirely on the job in hand.”
Prof. Wells adds, “I think they need somebody with strong automotive experience. Someone who knows how to rationalize the business. It needs a significant change of direction now.”
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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