Tesla is facing a cash crisis in the first quarter of 2025 due to slowing sales. CEO Elon Musk’s involvement in politics has scared off potential customers, leading to a decline in estimated deliveries by over 4%. This could put the company at risk of going free-cash-flow negative.
Analysts point to heavy spending on automation and robotics as a major concern. The stock has plummeted 30% year-to-date, wiping out gains made after the US election. Sales have also slumped in key markets like California and China.
Experts say Musk’s involvement in politics is adding an “added element of polarization” to Tesla’s sales. Analyst Ivan Drury notes that while some people may be drawn to Tesla’s cars, others may be deterred by Musk’s views. To boost sales, Tesla has been offering attractive incentives, including 0% financing deals and low APRs.
The company’s market value has fallen below $1 trillion, with its share price dropping 40% from its December peak. Despite being the leading electric vehicle (EV) seller last year, Tesla faces stiff competition and waning interest among consumers.
Source: https://www.axios.com/2025/03/06/musk-doge-cuts-tesla-stock