Tesla, once the undisputed leader in the electric vehicle (EV) market, is now facing a harsh reality: declining global sales, growing competition, and increasing political backlash. CEO Elon Musk’s close relationship with Donald Trump has raised concerns among investors and customers alike, with some suggesting that his political stance is beginning to affect the company’s performance.
The downward trend comes at a time when Tesla is already dealing with production challenges, tariff threats, and fierce competition from Chinese EV makers. With January 2024 marking the company’s first annual drop in deliveries, the road ahead looks bumpy for Musk’s automotive empire.
Sales Plummet Across Key Markets
Tesla’s struggles are evident worldwide, with sales plummeting across multiple key markets:
- France: Tesla sales fell by a staggering 63% in January compared to the same month in 2023.
- Germany: Sales plunged 59.5%, marking Tesla’s worst January since 2021. Musk’s alleged support for the far-right Alternative for Germany (AfD) party has fueled backlash.
- United Kingdom: Sales also declined, though Tesla has not disclosed exact figures.
- China: The EV giant’s 11.5% drop in sales comes as rival BYD achieved nearly 50% growth in the same period.
- Scandinavia: In Sweden and Norway, where EV adoption is among the highest in the world, Tesla saw a 44% and 38% drop in registrations, respectively.
The combination of falling sales and mounting tariff concerns has led some analysts to warn of a potential “Trump-lash” against Tesla.
Is Musk’s Political Influence Hurting Tesla?
Musk’s outspoken support for Trump and his increasing involvement in right-wing politics may be turning off consumers, especially in progressive markets where Tesla was once a favorite.
“There is an argument to be made that Tesla is beginning to be penalized for Musk’s close relationship to Trump,” noted Mike O’Rourke, chief market strategist at Jonestrading, in a research note.
The backlash isn’t just reflected in sales figures. In Colorado, a Tesla dealership was recently vandalized for the third time in two weeks, with offensive graffiti and broken windows, highlighting growing tensions surrounding the brand.
Trade Tariffs and Market Challenges
Tesla’s woes extend beyond politics. The company is also bracing for potential trade tariffs under Trump’s administration, which could significantly impact its operations.
“Over the years, we’ve tried to localize our supply chain in every market, but we are still reliant on parts from across the world for all our businesses,” said Vaibhav Taneja, Tesla’s Chief Financial Officer, during a recent earnings call. He acknowledged that new tariffs could “have an impact on our business and profitability.”
Adding to Tesla’s struggles is the lack of new vehicle models. The company has not introduced a brand-new car since late 2023, when it launched the Cybertruck. While Musk has hinted at a more affordable Tesla in 2025, competitors like BYD and Volkswagen are aggressively expanding their EV lineups.
Stock Price and Investor Concerns
Tesla’s stock has also taken a hit amid the negative news cycle. As of Monday morning, shares were trading around ZAR 6,590 ($350
R6,540.12), down from their December peak of ZAR 9,030 ($480
R8,969.31). The decline has wiped out billions from Musk’s net worth, though he remains one of the world’s richest individuals.
What’s Next for Tesla?
Despite the setbacks, Tesla remains a dominant force in the EV industry. However, the company must navigate political controversies, tariff risks, and increasing competition to maintain its position. Investors will be closely watching Tesla’s next moves, especially if Musk’s political ties continue to influence consumer sentiment.
Whether Tesla can rebound or if the “Trump-lash” will continue to drag it down remains to be seen.
