Sales Plunging, Protests Rising, Can Musk, Tesla Turn Things Around

Tesla shareholders breathed a sigh of relief on Wednesday morning, word leaking out of the White House suggesting CEO Elon Musk will soon give up his controversial role as the head of the Trump administration’s Dept. of Government Efficiency. Then, Tesla released its first-quarter sales numbers, global deliveries falling three times further than what Wall Street anticipated. Its stock rebound in reverse, a growing number of investors and analysts now wonder whether Tesla and its CEO can recover from the hit they’ve taken.

Tesla’s global sales plummeted by 13% during the first quarter of 2025, more than three times the consensus forecast among Wall Street analysts covering the carmaker. Every key market appeared to lose momentum, including North America, Europe and China, and there are few signs a recovery is imminent.

Quite the contrary. Where the experts were just months ago listing a variety of different challenges facing Tesla, most now focus on one in particular: backlash to the carmaker’s increasingly controversial CEO – in particular, but not limited to, his role as the head of the Trump administration’s Department of Government Efficiency.

That has triggered a wave of protests, the “Tesla Takedown” movement last weekend targeting over 200 dealerships in the U.S. and scores more around the world. There’ve been mounting reports of vandalism, including a dozen Tesla vehicles torched at a Rome showroom. And a growing number of Tesla owners have been trading in their vehicles, even as residual values have plummeted.

The question many have begun asking is whether Chief Executive Elon Musk and Tesla can recover. Anthony Johndrow, the CEO of Reputation Economy Advisors, is skeptical. Musk, he told Headlight.News has “lost credibility as a guy who can paint a very rosy future,” bolstering both Tesla sales and its stock price.

The numbers

Tesla delivered just 336,681 vehicles during the January-March quarter, down from 386,810 a year earlier. That marked the Texas-based company’s worst first-quarter performance in three years. And it follows Tesla’s first full-year decline in a decade, sales dipping 1.1% worldwide in 2024.

Analysts had expected a weak performance, but the consensus among 14 analysts surveyed by Visible Alpha was a much more modest 3.7% decline, to 372,410 deliveries. In years past, Tesla could have counted on help from at least one of its three key markets. But while it doesn’t break out sales by region, data trackers said demand was demand pretty much everywhere from Beijing to Boston to Berlin. European demand was off by roughly half, according to a continental auto trade group, while China and the U.S. were also believed to be down by double-digits.

Tesla remains a global behemoth, but its market share has nearly been halved over the past four years, to around 40%, according to Telemetry Research, and could fall even further. In contrast to the automaker’s weak performance, competitors such as Ford, General Motors and Hyundai collectively reported double-digit gains in the U.S. and other key markets. Barring a sudden turn of events, according to market analysts, Chinese upstart BYD is now positioned to top Tesla in both sales and earnings in 2025.

Wall Street reverses course

Anyone who has invested in Tesla over the past decade or more knows that they’re in for a rollercoaster ride, but the company’s shares seemed to be ready to hit new highs thanks to the ties between CEO Musk and President Donald Trump – the South African-born executive having invested over $270 million in the Republican candidate’s campaign.

But, after hitting a mid-December high of $488.54, shares traded under the ticker TSLA began to tumble. At their low they dropped as low as $220, but began to rebound after nine consecutive weekly losses, closing Wednesday trading at $282.76, a more than 7% gain.

Observers credited White House leaks suggesting Musk would soon step down from his controversial role at DOGE, allowing him to focus more on Tesla. “Exactly what the stock needed,” Stock Trader Network Chief Strategist Dennis Dick, who has a position in the stock, told Reuters. “Shareholders are hoping Musk will now have the time to focus on rebuilding the Tesla brand.”

That was before the sales numbers came out, just as the bell sounded on the NASDAQ, however. Within hours, shares crashed, losing more than 8%, at $260.10. It’s anybody’s guess what will happen when markets reopen Thursday, but there’s a clear sense of jitters among investors and analysts.

More Tesla News

• Protesters Gather at Tesla Stores Worldwide
• Musk Under Growing Pressure to Quit Trump or Leave Tesla
• Could Tesla Co-Founder Straubel Replace Elon Musk as CEO?

The Musk Factor

What’s happened? Call it “the Musk factor.” Tesla may sell EVs – and solar roof panels and battery backup systems – but it also sells Elon Musk who has, indeed, painted a very rosy future. That has helped win over EV buyers, said Johndrow, and, when it comes to investors, Musk has been able to win the sort of stock price multiples normally reserved for the best tech companies, like Apple, Microsoft and NVIDIA.

But while Musk’s image has taken occasional hits in the past, he “has not dealt with such a challenge” before, said Eric Schiffer, chairman and CEO of Reputation Management Consultants.

The damage began with Musk’s October 2022 takeover of social media site Twitter. Renamed X, it took a decided swing towards conservative politics as it was rebranded “X,” Musk allowing many extremists to come back onto the platform. That included Trump who was barred from Twitter for several years due to incendiary posts. But it was with his new role in the White House that Musk fired up the opposition.

That has led to a backlash among the traditionally left-leaning and environmentally minded car buyers who helped fuel Tesla’s emergence. While Schiffer said it’s possible that Tesla can “open up a whole other lane” among conservative motorists, other analysts don’t expect anything close to a one-for-one substitution – certainly not with Trump openly disdainful of EVs.

Since the president’s inauguration, the opposition has rapidly grown more vocal, as evidenced by the global reach of the March 29 Tesla Takedown rallies – and the increasing reports of vandalism targeting not only Tesla stores but vehicles already in owners’ hands.

Can Musk and Tesla recover?

Musk has himself indicated he could end his active role in the Trump administration soon. But the question is whether he can rebuild what was once a sterling reputation, with admiring buyers and legions of “stans,” or active fans who flocked to websites and Reddit threads devoted to the CEO’s every move and thought.

The barrage of demonstrations and social media posts has been “effective” at tarnishing Musk, said Schiffer. But while the Tesla CEO is “dancing” with the sort of image damage that can’t be recovered from, the reputation expert believes Musk – and Tesla, by extension – “hasn’t entered the brand suicide vortex yet.”

Pulling out of the White House is critical, stressed Schiffer, and then going quiet on politics in general. “If he plays his cards right, “he’ll benefit.” In the U.S., that is.

Both Schiffer says “the bigger problem is international.” There’s the little matter of the Trump tariffs, which the CEO supports. Musk also burned bridges in Europe by supporting Germany’s extremist AfD party in recent elections – and by twice making what was seen as a Hitler-style salute during a Trump inauguration event. Sales in the EU’s largest national market were off by more than two-thirds in February and March.

Johndrow agrees that Tesla may struggle to rebound in both Europe and China – and at a particularly bad time, with traditional brands, as well as Chinese upstarts like BYD and Geely already gaining traction before Trump returned to office.

Replacing Musk

While there’s been little doubt Musk would eventually be replaced at DOGE, it’s only now that the idea of replacing him at Tesla has begun taking hold.

“The moment of truth” has come for Tesla and Musk, long-time bull Dan Ives, of Wedbush said late last month. Ross Gerber, another major Musk backer and partner in Gerber Kawasaki, took things a step further in a recent interview on CNBC. He said the time had come for Musk to turn over the job of CEO to another executive, who could begin the job of rebuilding Tesla’s damaged reputation.

But who could fill that role and continue painting the rosy pictures that have done so well with EV buyers and Wall Street investors? That’s a far more difficult challenge.

-“C0uld u replace Musk and sell more Teslas? I think so,” said Johndrow. “Could you get the stock back up? I don’t think (anyone else would) justify that valuation.”