Elon Musk Faces Backlash as Tesla Struggles with Production Delays, Vandalism, and Market Pressure
Tesla has reported a staggering 13% decline in deliveries for the first quarter of 2025, falling far below analysts’ expectations and sparking concerns about the company’s direction. The electric vehicle (EV) giant delivered 336,681 cars during the three-month period, significantly down from 386,810 in the same quarter last year and missing Wall Street’s forecast of over 390,000, according to Bloomberg data.
The news sent Tesla’s stock tumbling as much as 6% in Wednesday trading, adding to a broader decline of roughly 30% since the start of the year. Industry experts, including Wedbush analyst Dan Ives, described the report as a “disaster on every metric” and warned of a deepening crisis if CEO Elon Musk does not refocus his leadership.
Political Firestorm and Brand Crisis
Beyond its financial struggles, Tesla is facing a wave of controversy tied to Musk’s political affiliations. The billionaire entrepreneur has come under fire for his involvement with President Trump and the Department of Government Efficiency (DOGE), an agency tasked with reducing government spending. Critics argue that Musk’s engagement with DOGE is fueling division and distracting from Tesla’s operations.
“Musk needs to stop this political firestorm and balance being CEO of Tesla with DOGE,” Ives said in a note to investors. “The future is bright, but this is a full-blown crisis Tesla is navigating now—and it’s primarily self-inflicted.”
Adding to the turmoil, Tesla dealerships in the U.S. and overseas have been targeted by vandals in recent weeks, reportedly in response to Musk’s ties to the Trump administration. The attacks, which include arson, have prompted Attorney General Pam Bondi to label them as acts of domestic terrorism.
Production Woes and Rising Competition
Tesla’s declining sales can also be attributed to production challenges and fierce competition, particularly in China. The company’s Model Y assembly lines underwent significant updates across its four global factories, causing a temporary slowdown in output. Despite these setbacks, Tesla remains optimistic about the future.
“While the changeover of Model Y lines across all four of our factories led to the loss of several weeks of production in Q1, the ramp of the New Model Y continues to go well,” the company stated.
Still, Tesla faces mounting pressure from Chinese EV manufacturer BYD, which continues to gain market share in a critical growth region. At the same time, an increasing number of Tesla owners are trading in their vehicles for other brands, with March seeing the highest-ever share of Tesla trade-ins at dealerships, according to Edmunds.
Musk Tries to Reassure Employees
In response to the growing challenges, Musk held an all-hands meeting with Tesla employees last month, urging them to stay committed to the company’s vision. He encouraged them to “hang on to your stock,” touting Tesla’s long-term roadmap and the development of its long-promised fully autonomous driving technology.
Musk also condemned the recent vandalism targeting Tesla stores, emphasizing the importance of respecting differing viewpoints.
“I understand if you don’t want to buy our product, but you don’t have to burn it down,” Musk said. “That’s a bit unreasonable.”
What Lies Ahead for Tesla?
Despite the current turbulence, Tesla remains a dominant force in the EV industry. However, the company must address its production delays, regain investor confidence, and navigate an increasingly competitive market while keeping political distractions at bay.
For now, all eyes are on Musk and whether he can steer Tesla back on course—or if the company’s challenges will continue to mount.
