Tesla investors are bracing for another year of declining sales as Elon Musk’s political views continue to tarnish the brand’s image. The company posted its first-ever sales decline in 2024, with quarterly deliveries dropping by 13%. Analysts expect a further 9% drop in 2025 deliveries, driven primarily by the impact of recent “brand damage” caused by Musk’s involvement in far-right politics.
Protests against Musk have spread across multiple countries, with consumers and investors calling for boycotts of Tesla vehicles and stock. The company has not announced when its anticipated cheaper car will be launched, but analysts warn that a barebones version may not be enough to stem the decline.
Despite Musk’s promise to return to growth this year, Deutsche Bank analysts expect a 5% sales drop in 2025, citing the need for Tesla to prioritize delivery volumes over margins. Morningstar analysts estimate that tariffs on materials used to make batteries could add 5-10% to Tesla’s vehicle cost.
Musk’s involvement in Trump’s administration and his work as an adviser at the Department of Government Efficiency have raised concerns among investors and analysts. Wedbush analyst Dan Ives warned that Musk’s role at DOGE “is not sustainable” and may lead to permanent brand damage.
Tesla has refreshed its Model Y lineup, with deliveries starting in China in late February, but it remains to be seen whether this will stem the sales decline. Investors will closely watch the company’s response to the growing protests and its plans for a cheaper car in 2025.
Source: https://www.reuters.com/business/autos-transportation/tesla-investors-brace-another-year-sales-decline-musk-backlash-grows-2025-04-04