Tesla, the world’s most iconic electric vehicle (EV) manufacturer, is facing yet another troubling quarter as sales drop sharply, raising questions about the company’s future and the impact of its CEO Elon Musk’s increasingly political public image. Once a symbol of innovation and sustainability, Tesla now finds itself navigating through shrinking demand, rising competition, and a CEO whose political commentary and controversial actions may be doing more harm than good.

As data rolls in from the second quarter of 2025, analysts and investors alike are asking: Has Elon Musk’s political activism started to cost Tesla real money?

📉 A Troubling Trend: Sales Decline in Key Markets

Tesla reported a 13% decline in global deliveries in Q2 2025 compared to the same quarter last year. That marks the third consecutive quarterly decline, a worrying sign for a company that once saw double-digit growth year after year.

The drop was particularly significant in:

Europe: A 17% year-over-year decline, with Germany, France, and the Netherlands seeing the steepest drop.

United States: A 12% dip amid cooling demand and fierce competition from Ford, Rivian, and Lucid.

China: A modest 6% decrease, but enough to lose ground to BYD and other domestic EV giants.

 

 

Tesla’s market share in the global EV space has dropped below 15% for the first time since 2020, a far cry from its once-dominant 25%.

🗣️ Musk’s Politics in the Spotlight

Many experts point not just to economic trends or supply chain issues—but to Elon Musk’s increasingly politicized presence online and in public discourse—as a major reason behind the sales slump.

Over the past year, Musk has:

Publicly criticized progressive governments in Germany, Canada, and parts of the U.S., calling them “anti-business” and “anti-freedom.”

Retweeted and amplified far-right content and conspiracy theories, sparking backlash from liberal-leaning customers and environmentalists.

 

 

 

Repeatedly attacked the Biden administration, accusing it of favoring legacy automakers over Tesla despite evidence to the contrary.

Openly supported controversial figures and causes, leading to consumer boycotts and severed partnerships.

 

 

While Tesla doesn’t officially endorse any political platform, Elon Musk’s personal branding is deeply tied to the company, and his words carry financial weight.

👥 A Polarized Customer Base

Tesla’s early adopters were largely tech-savvy progressives and environmentalists. These consumers were drawn to Musk’s vision of a cleaner, more sustainable future. But in recent years, many of them have become disillusioned.

A 2025 survey by EV Consumer Watch found that:

48% of former or potential Tesla buyers cited “discomfort with Elon Musk’s political views” as a reason for switching to another brand.

62% said they believe Tesla is “less committed to sustainability” than it was five years ago.

More than half preferred EVs from companies they saw as “neutral” or “non-political.”

 

 

Some former Tesla owners have taken to social media using hashtags like #BoycottTesla or #FireElon, calling for the company to separate itself from its controversial CEO.

🏭 Product Delays and Quality Concerns

Musk’s political distractions may also be contributing to operational issues. Tesla has faced:

Production delays for the long-awaited Cybertruck, which still struggles with scaling issues and regulatory approvals in key markets.

A recent wave of recalls, including for braking issues in the Model 3 and software malfunctions in Autopilot systems.

Sluggish updates on the next-generation Roadster and delays on the promised low-cost “Model 2,” which is now projected for 2026.

 

 

Employees at Tesla’s Fremont and Austin factories have anonymously reported that internal morale is low, citing unclear leadership and shifting priorities.

🏎️ Rising Competition from All Sides

While Tesla struggles, its competitors are seizing the moment.

BYD has overtaken Tesla in total EV sales globally, fueled by its strong position in Asia and growing presence in Latin America and Europe.

Volkswagen and Hyundai-Kia have made major strides with affordable, high-performance EVs that are winning over Tesla’s former customer base.

Rivian and Lucid have carved out niches in the premium electric truck and luxury sedan markets, respectively.

 

 

Tesla’s lack of model diversity, compared to these competitors, is also starting to show. While others offer dozens of models and price points, Tesla is still focused primarily on the Model 3, Y, S, and X, with no fully new model launched in over three years.

📉 Investor Warnings and Stock Slide

Tesla’s stock (TSLA) has taken a hit amid the turmoil. After peaking in early 2024, it has fallen over 35% in the past 12 months. Following the Q2 sales report, shares dropped another 8%, prompting a wave of analyst downgrades.

Morgan Stanley, long one of Tesla’s bullish backers, recently revised its rating to “Hold,” citing:

“Brand erosion due to leadership controversies and diminishing global demand.”

Goldman Sachs echoed similar sentiments, noting that Tesla now faces “identity confusion”—caught between being a tech firm, a car company, and a political platform.

🧠 The Bigger Picture: Brand Identity Crisis

Tesla’s troubles reflect more than just market conditions—they signal a deeper crisis of identity.

Once seen as a clean-tech pioneer, Tesla now finds itself in murkier waters:

Is it a luxury brand? A mass-market EV maker?

Is it a tech platform or an automotive manufacturer?

Is it politically neutral, or an extension of Elon Musk’s personal ideology?

These questions matter to investors, customers, and regulators alike.

🔄 Is There a Way Back?

Some insiders believe Tesla can still recover—if it acts fast:

Rebrand Tesla independently of Elon Musk, or limit his role to CEO without a public-facing political platform.

Diversify its leadership and bring in respected voices in sustainability, clean energy, and automotive innovation.

Accelerate new model launches to re-engage disillusioned customers and attract new markets.

Reinvest in quality and customer service, two areas where Tesla has seen growing criticism in recent years.

 

 

However, as long as Musk remains deeply tied to the company’s public identity—and continues to dominate headlines with polarizing views—Tesla may struggle to regain its once-unquestioned dominance.

🧭 Final Thoughts

Tesla’s recent sales plunge is not merely a result of market saturation or economic slowdown. It’s a reflection of a deep tension at the heart of the brand: the collision between innovation and ideology, engineering and ego, technology and politics.

Elon Musk’s political moves have transformed him from a celebrated visionary into a divisive figure. And in doing so, he may have put the very company he built at risk.

Tesla can still be saved—but first, it must decide what it wants to be: a world-changing technology firm, or a political lightning rod. In the current climate, it may not be able to be both.