Tesla is at the center of controversy as customers react to CEO Elon Musk’s actions. Some loyal Tesla owners are now walking away from the brand. Protests have erupted in several countries, and Tesla’s sales are slowing down. The company, once a leader in electric vehicles, is facing growing challenges.
Customers Turn Away from Tesla
Ben Kilbey, a long-time Tesla fan, is selling his Model Y. He once loved the car but no longer supports the company due to Musk’s actions. “I don’t support division or unkind actions,” he says. “There are ways to make decisions without belittling people.”
Kilbey is not alone. Many customers are upset about Musk’s leadership. Their anger grew after Musk took charge of the Department for Government Efficiency (DOGE). His role includes cutting federal spending, but critics say his methods are harsh.
Musk’s political moves have also drawn criticism. He gave a speech at a rally for the far-right Alternative für Deutschland party in Germany. He has also attacked British politicians, including Prime Minister Keir Starmer.
Some people now see Musk as too divisive. Protests have taken place outside Tesla dealerships in the U.S., Canada, the UK, Germany, and Portugal. While many protests have been peaceful, some turned violent. In France and Germany, Tesla vehicles were set on fire.
In the U.S., the Tesla Cybertruck has become a target. Videos show Cybertrucks covered in garbage or vandalized with hateful symbols. Some have even been used as makeshift skateboard ramps.
Political Tensions Rise
Former President Donald Trump quickly defended Tesla. He invited the company to showcase its cars outside the White House. He also announced plans to buy a Tesla and called attacks on the company “domestic terrorism.”
Musk responded to the violence in a Fox News interview. “This level of violence is insane and deeply wrong,” he said. “Tesla simply makes electric cars and does not deserve these vile assaults.”
Despite this, Tesla’s brand image has taken a hit. Many EV buyers are distancing themselves from the company. Analysts are now asking: Can Tesla continue its success with Musk in charge?
A Declining Market Share
Tesla once dominated the EV industry. The Model S, launched in 2012, changed public perception of electric cars. It showed they could be powerful and practical.
Today, Tesla’s sales are dropping. The Model Y was the world’s best-selling car last year. However, Tesla’s overall sales declined for the first time in over a decade. They fell from 1.81 million to 1.79 million. The drop was small but raised concerns. Profits also fell.
The trend continued in 2024. Tesla’s new registrations in Europe fell by 45% in January. Sales dropped further in February, except in the UK, where they rose by 21%. In Australia, sales declined as well.
Tesla’s Chinese factories have also seen setbacks. Shipments fell by over 49% in a single month. UBS analyst Joseph Spak predicted a 5% drop in Tesla’s global sales for 2024. This was lower than market expectations of 10% growth. The prediction caused Tesla’s stock to drop by 15% in one day. Since the start of the year, the stock has fallen 40%.
Morning Consult research suggests Musk’s political actions have hurt Tesla in Europe and Canada. In China, the company remains strong. In the U.S., opinions are split. Some support Musk’s government cuts, while others reject his politics.
Competition and an Aging Lineup
Tesla faces another issue: its lineup is getting old. The Model S has been on the market since 2012. The Model X followed in 2015. Even the Model 3 and Model Y are aging.
Stephanie Valdez Streaty, director at Cox Automotive, says Tesla is falling behind. “Their lineup hasn’t seen major updates,” she explains. “The Cybertruck is niche, and the Model Y refresh was minor. Meanwhile, competition is surging.”
Chinese automakers like BYD are growing fast. BYD recently unveiled a charger that adds 250 miles of range in just five minutes. This beats Tesla’s superchargers. Hyundai, Kia, Xpeng, and Nio are also releasing high-quality EVs.
“Tesla hasn’t introduced major innovations lately, and that’s a big problem,” says Prof. Peter Wells of Cardiff University.
Can Musk Stay Focused?
Musk’s focus appears to be elsewhere. He is heavily invested in self-driving technology. He recently claimed Tesla would launch a robotaxi service in Texas by June. However, experts remain skeptical. “Every year, Musk says self-driving Teslas are coming, but they never do,” says Jay Nagley of consultancy Redspy.
Musk is also managing multiple businesses. He owns the social media platform X, runs the AI company xAI, and oversees SpaceX. SpaceX has faced setbacks with its Starship rocket program.
“It’s unclear how much attention Musk is giving Tesla,” says Prof. Wells. “The company needs leadership fully committed to the auto industry.”
Musk remains Tesla’s largest shareholder, holding 13% of its stock. Investment firms like Vanguard and BlackRock also own significant shares. Tesla’s stock has declined but is still valued at over 100 times earnings. Investors are betting on future breakthroughs.
The Future of Tesla
Some analysts believe Tesla would benefit from new leadership. “A new CEO would be the best move now,” says Matthias Schmidt of Schmidt Automotive Research. “It would solve Musk’s conflicts of interest and help Tesla refocus.”
Prof. Wells agrees. “Tesla needs someone with deep industry experience to rationalize the business. It’s time for a major change.”
With slowing sales, a stagnating product line, and growing backlash, Tesla faces serious challenges. The company was once the face of EV innovation. Now, it must decide if Musk is still the right person to lead it into the future.