For years, Elon Musk has been the public face and driving force behind Tesla, Inc., but as 2025 unfolds, it’s becoming increasingly clear: the company’s most pressing issues go far beyond its polarizing CEO. From deepening financial concerns to mounting competition and internal leadership instability, Tesla is facing a multi-front crisis that could reshape its future in the electric vehicle (EV) market.

Falling Sales & Declining Market Share

Tesla’s first-quarter 2025 earnings revealed a troubling truth: vehicle deliveries are down nearly 9% year-over-year, marking one of the steepest declines in the company’s history. While the broader EV market continues to grow, Tesla’s once-dominant position is eroding, especially in China and Europe, where local manufacturers like BYD and Volkswagen are gaining ground.

Even in the U.S., once Tesla’s stronghold, Ford, Hyundai, and GM have introduced more affordable and feature-packed EVs that challenge Tesla’s core lineup. The Model 3 and Model Y, once revolutionary, are now starting to show their age in a crowded, fast-evolving field.

Aging Product Line & Innovation Slowdown

Tesla built its reputation on cutting-edge innovation. But now, critics and investors are beginning to ask: Where’s the next big thing?

The long-awaited Cybertruck was launched with much fanfare but has faced delays, production challenges, and mixed reviews.

The next-generation Roadster is still nowhere in sight.

Promises of full self-driving (FSD) capabilities remain unfulfilled, and regulatory scrutiny over safety claims continues to grow.

While competitors aggressively roll out updated models with better software and faster charging, Tesla’s development pipeline appears to be stalling.

Leadership Gaps & Executive Exodus

While Elon Musk’s erratic behavior often grabs headlines, there’s a more serious issue brewing: Tesla’s leadership team is fracturing.

Over the past two years, a wave of high-level departures has left key departments—such as engineering, AI, and manufacturing—without experienced leadership. Many of these exits are attributed to Musk’s micromanagement, volatile decision-making, and shifting focus toward other ventures like X (formerly Twitter), SpaceX, and Neuralink.

Without a stable executive bench, Tesla’s long-term vision and operational cohesion are at risk.

Global Strategy Missteps

Tesla’s global ambitions have hit turbulence. In China, the company is losing ground to BYD and other EV players offering cheaper, domestically-produced models. In Europe, Tesla’s Berlin Gigafactory has faced labor unrest and slower-than-expected ramp-up.

Furthermore, Tesla’s strategy to cut prices in 2024 and 2025 to stay competitive has squeezed margins, raising concerns over long-term profitability—even as operating costs rise.

Public Perception & Musk’s Polarization

Although Elon Musk has a loyal following, his increasing politicization and online controversies are turning off investors and consumers alike. From attacks on media and regulatory agencies to controversial political endorsements, Musk’s public image is becoming a liability for the brand—especially in liberal-leaning markets where Tesla previously thrived.

Brand studies have shown a dip in Tesla’s favorability among key demographics, particularly younger and climate-conscious buyers, many of whom are now considering alternatives.

Conclusion: A Company at a Crossroads

Tesla’s current challenges aren’t just about one man. While Elon Musk’s leadership style and distractions play a role, the company is facing systemic issues: product stagnation, fierce global competition, executive instability, and brand erosion.

To survive—and thrive—Tesla must go back to what made it a revolutionary force in the first place: bold innovation, user trust, and laser-sharp execution. Whether or not Musk can lead that reset remains the biggest question of all.