Despite a notable drop in sales in 2024, Tesla remains the global leader in electric vehicles, with over 1.7 million cars sold. Although the brand maintains very respectable volumes, the decline in sales in January 2025 is cause for concern.
Since Elon Musk’s appointment on January 20 under the Trump administration, controversies have been mounting. The renowned CEO’s behavior, deemed provocative, and his stances threaten Tesla’s stability in 2025.
A delicate situation in Europe
European households have significantly changed their consumption habits over the past two years. Price-quality ratio, proximity, and the authenticity conveyed by brands are decisive criteria when choosing a new car.
Could this factor explain the collapse of Tesla’s sales in Europe?
In January 2025, the European market dropped by 50%, including a -75% decline in Spain, -63% in France, and -60% in Germany.
Despite the excellent reputation of its vehicles, one in four drivers is considering abandoning the brand, often due to the discomfort of being associated with Elon Musk. This is largely because of his ambiguous and highly controversial gesture during Donald Trump’s inauguration ceremony, as well as his numerous divisive statements that have embarrassed customers. Calls to boycott the brand have emerged, highlighting once again the importance of a company’s public image.
Internal crisis, worried shareholders and employees.
The image that Elon Musk has promoted until now was that of a businessman, leader, visionary, and devoted to high technology. However, in recent weeks, this leadership has come into question, particularly by his own employees and shareholders. With only 13% of the company’s shares, Musk finds himself in a very difficult position regarding his role as CEO, with some stakeholders openly calling for his departure.
In just one week, Elon Musk lost nearly $41 billion. All of his companies are affected, particularly the social network X, which has seen a loss of over 7 million users at the beginning of this year.
An increasingly competitive market.
Is it only Elon Musk’s personality that is causing this decline ?
For several years, the electric vehicle market has been coveted by many automotive brands, especially in Europe, with increasingly strict regulations on CO2 emissions. Among these brands are BYD, Nio, and Xpeng, which are gaining traction and selling more than Tesla in certain European markets. However, traditional brands like Renault are still in the race. With its R5 E-Tech, the French manufacturer recently won the title of Car of the Year 2025.
To refresh its aging lineup, Tesla unveiled the facelift of its Model Y, the automaker’s best-selling vehicle, at the beginning of January. Named Juniper, this new version of the electric SUV aims to boost global sales.
Additionally, the brand has faced some setbacks regarding the launches of its latest innovations. The Cybertruck, for example, has been released with more than two years of delay from the original date.
Can Tesla bounce back in 2025?
In response to the increasing number of zero-emission vehicles, Tesla has chosen to lower its prices. The goal is to compete, particularly against Chinese rivals. The brand is also counting on the development of technologies like “Full Self-Driving” and the sale of robotaxis. Additionally, Tesla is trying to position itself in the “Megapacks” market, which are giant batteries that allow businesses to manage their energy flow and remain operational in case of a power outage. Its new factory was inaugurated on Tuesday, February 11, in the suburbs of Shanghai, a city that is currently in a trade war with Donald Trump.
In a positive sign, the new Model Y “Juniper” received a warm welcome in the Chinese market, with over 70,000 orders in just 5 days. However, overall sales in the country are down by 11.5%. This decline can be attributed to the fact that Chinese consumers are leaning towards local brands.
2025, a decisive year for Tesla.
The American company is at a strategic turning point in its history. Despite constant technological advancements and a status as a pioneer in electric vehicles, the brand is currently weakened by an unstable global economic environment, political controversies, and a tarnished corporate image due to scandals involving its leader.
The launch of the new Model Y, price reductions, and innovations such as the Megapacks could bring a new momentum for the year 2025. However, one question remains : Will Elon Musk be a long-term obstacle to Tesla’s future ? His image now seems to be in question, to the point where some shareholders are considering his removal.
Will Tesla be able to win back its audience, especially its loyal customers? Will buyers be willing to separate the offered products from Musk’s personality? 2025 will lay the foundations for the future of the American brand, as well as its ability to regain the trust of a market that is more competitive than ever!
