Tesla is facing its most severe crisis yet as consumer defections and political controversies converge to threaten the electric vehicle pioneer’s dominance. With Elon Musk now entrenched in the Trump administration’s Department of Government Efficiency (DOGE), the brand’s operational and reputational challenges have reached a boiling point.
Tesla’s stock has plummeted 42% year-to-date (as of March 2025), with a single-day 15.4% drop on March 11 triggered by weak global sales and leadership concerns. Deliveries in Germany fell 59%—the lowest since 2021—while China saw an 11.5% year-over-year decline. In Europe, Tesla’s market share dipped below 10% for the first time in five years, ceding dominance to Volkswagen despite retaining top-selling models like the Model Y and Model 3.
Edmunds data reveals March 2025 as the peak month for Tesla trade-ins, with 2017-or-newer models comprising 1.4% of all trade-ins—a 250% increase from March 2024’s 0.4%. Protests and vandalism targeting Tesla facilities have surged globally, fuelled by Musk’s ties to far-right movements and his role in the Trump administration’s DOGE, which has slashed federal jobs and sparked fears of Social Security cuts.
Tesla’s European sales imploded in early 2025, with 75% declines in Spain, 63% in France, and 60% in Germany. Surveys indicate 25% of drivers now consider abandoning the brand due to Musk’s polarising gestures, including a controversial “Roman salute” during Trump’s inauguration. Brand Finance reported a 26% drop in Tesla’s brand value ($15 billion) in 2024, which marked consecutive annual losses.
Meanwhile, legacy automakers and startups are capitalising on Tesla’s missteps. Ford’s Mustang Mach-E and Hyundai’s Ioniq 6 offer competitive pricing and ranges up to 342 miles, while Volkswagen’s ID series dominates European charts.
Musk’s dual role as Tesla CEO and DOGE head has raised concerns about divided attention. Analysts warn that sustained consumer distrust and Musk’s erratic public persona—coupled with $132 billion in personal wealth losses in 2025—could irreparably damage the brand. While Tesla retains innovation potential in AI and autonomous driving, its ability to regain market trust remains uncertain.