Tesla’s no rookie when it comes to trials and tribulations.
Tesla’s CEO, Elon Musk, has earned equal praise and criticism for his unpredictable nature. As a result, Tesla’s stock price has soared and sold off many times over the past decade.
Elon Musk’s supporters point to his success in seemingly single-handedly catapulting the electric vehicle era. His foes complain of failed promises on model launch timelines and autonomous vehicles.
💵💰Don’t miss the move: Subscribe to TheStreet’s free daily newsletter 💰💵
More recently, Musk’s spending of hundreds of millions of dollars to support President Trump’s election and spearhead the Department of Government Efficiency, or DOGE, an organization in the executive branch tasked with cutting costs, has made the debate more contentious.
Musk’s move into politics has frustrated many long-time Tesla fans, causing sales in key markets in Europe, China, and states like California to stumble.
Decreased demand for Tesla cars and questions about Musk’s dedication to Tesla amid his many ongoing projects have contributed to a massive sell-off in Tesla’s stock price. Since December’s highs, Tesla shares have tumbled nearly 50%.
Elon Musk has come under fire in 2025, causing Tesla shares to fall.
Tesla’s moat is shrinking
Tesla’s (TSLA) success is rooted in Elon Musk’s decision to focus its electric vehicles on performance. Instead of creating and marketing cars that are solely environmentally friendly, Musk designed high-performance luxury cars to rival Mercedes Benz, BMW, and Porsche.
Related: Surprising China news sends Tesla stock soaring
The performance-first strategy made Teslas coveted by celebrities and speed enthusiasts, leaving competitors like Ford and General Motors caught flat-footed.
That moat, however, may have disappeared.
Just about every global car company, including Detroit’s big three, has invested billions in developing its own high-end EVs. Many deliver similar performance and arguably better fit-and-finish than Tesla.
Unsurprisingly, this has affected Tesla’s electric vehicle market share, and Musk’s polarizing political stance is not helping.
Sales in many key markets have nose-dived, including in China. In February, the China Passenger Car Association reported that Tesla’s wholesale sales, including exports and retail sales, fell 49% year-over-year. Overall, Tesla sold 30,688 new energy vehicles (NEVs) in China, the fewest cars sold in over two years and far below the 318,233 vehicles sold by Chinese EV rival BYD.
Tesla gets more disappointing news out of Europe.
The sales decline doesn’t seem to be over.
On April 1, the French industry association Plateforme Automobile said Tesla vehicle registrations were 3,157 in March, a 37% drop.
Related: New data suggests that things are about to get worse for Tesla
For perspective, total EV registrations in France only fell 15%, suggesting Tesla lost considerable market share in the country. France had traditionally been Tesla’s second-largest European market behind the United Kingdom.
The dip in Tesla demand continues a troubling trend. French registrations fell 26% and 63%, respectively, in February and January.
Altogether, In Q1, Tesla’s market share in France fell to 1.63% from 2.55% a year ago.
The German Federal Motor Transport Authority previously reported that Tesla sales collapsed 76% in February to 1,429 cars, despite a 31% bump up in electric vehicle registrations.
It’s not just Europe that’s a problem.
Tesla’s U.S. sales slipped 1% in 2024, the first annual decline in over a decade. And Tesla units sold only increased by 2.3% in the fourth quarter, while total EV units sold rose by 15%, according to the Cox/KBB quarterly EV sales report.
Meanwhile, Ford’s EV sales rose 16%, and General Motors’ Cadillac, GMC, and Chevrolet all notched EV growth to over 100%.
Of course, Tesla’s stock drop this year may have already priced in much of the recent sales declines.
So far, Tesla’s stock price is looking past the disappointing European sales news, trading up 5% at mid-day ahead of its deliveries update on April 2.
Nevertheless, investors will want to see these trends stabilize soon for the conviction that the worst is behind the company.
Related: Veteran fund manager unveils eye-popping S&P 500 forecast