Tesla has long been at the forefront of the electric vehicle (EV) revolution, but recent events suggest that the company is facing mounting challenges that go beyond just its controversial CEO, Elon Musk. While Musk’s political statements and government role have sparked backlash, Tesla’s struggles extend to declining sales, increased competition, and an aging product lineup.
Ben Kilbey, a strong supporter of sustainable transport, recently decided to sell his Tesla Model Y after three years of ownership. His reason? Disapproval of Musk’s actions, including the handling of US government employees and his involvement in politics abroad. Kilbey’s decision is not an isolated case. Protests against Musk and Tesla have erupted worldwide, with demonstrations outside dealerships in the US, Canada, UK, Germany, and Portugal. Some protests have turned violent, with Tesla showrooms and charging stations being vandalized, and even cars set on fire in France and Germany.
Musk, in response, has condemned these acts of violence, stating, “Tesla just makes electric cars and has done nothing to deserve these evil attacks.” Despite his defense, the question remains—how much is Musk’s public image affecting Tesla’s brand and future prospects?
Declining Sales and Market Uncertainty
Despite its position as the world’s best-selling EV maker, Tesla is facing its first decline in sales in over a decade. The company’s sales dropped from 1.81 million to 1.79 million units last year, raising concerns for a business that thrives on rapid growth. In early 2025, Tesla’s European market suffered a major hit, with new registrations falling by 45% in January. The downward trend continued in major markets through February, except in the UK, where sales increased by 21%.
Tesla’s struggles have been particularly visible in China, a critical market for the company. Shipments of its Chinese-made vehicles fell by more than 49% in early 2025. In March, a research note from Joseph Spak of Swiss bank USB predicted a 5% decline in Tesla’s worldwide sales this year—contradicting earlier expectations of 10% growth. This prediction sent Tesla’s share price tumbling by 15% in a single day, adding to an overall 40% decline since the start of the year.
Surveys by Morning Consult Intelligence indicate that Musk’s controversial actions have damaged Tesla’s reputation, especially in the EU and Canada. While US sentiment remains mixed, data suggests that high-income consumers, who are more likely to buy EVs, are increasingly considering alternatives to Tesla.
An Aging Model Lineup and Increasing Competition
Beyond Musk’s controversies, Tesla’s product lineup is beginning to show its age. Once known for groundbreaking innovation, the company has not introduced a fresh mainstream model in years. The Model S (2012) and Model X (2015) remain in production with only minor updates. Even the more recent Model 3 and Model Y are starting to feel outdated in an increasingly crowded EV market.
Automakers like Hyundai and Kia have gained recognition for producing high-quality EVs, while Chinese brands such as BYD, Xpeng, and Nio are expanding aggressively. BYD, in particular, has emerged as a serious threat, offering EVs with strong performance at lower prices. The company recently announced an ultra-fast charging system that provides 250 miles of range in just five minutes—outpacing Tesla’s own charging technology.
The Robotaxi Gamble
While Tesla’s competitors focus on expanding their model ranges, Musk appears to be prioritizing autonomous driving. He has promised that Tesla will have a robotaxi service operating in Texas by mid-2025. However, critics point out that Musk has made similar claims in the past, including a 2019 prediction that Tesla would soon have a million autonomous robotaxis on the road.
Tesla’s “Full Self-Driving” (FSD) package remains controversial, as it still requires drivers to stay attentive and intervene when necessary. Industry analysts argue that Musk’s fixation on autonomy might be diverting attention from more immediate concerns, such as vehicle design and production challenges.
Can Tesla Succeed With Musk at the Helm?
Musk is currently balancing multiple responsibilities, including leading Tesla, SpaceX, social media platform X, and artificial intelligence firm xAI. His involvement in the US government’s Department for Government Efficiency (DOGE) adds another layer of complexity. In a recent interview, Musk admitted that managing all these commitments is “difficult.
Some experts argue that Tesla needs a CEO fully dedicated to the automotive industry. Prof. Peter Wells of Cardiff University suggests that Tesla would benefit from “someone with strong automotive experience” who can make well-informed strategic decisions.
Despite Tesla’s recent struggles, Musk remains firmly in control. He owns 13% of Tesla’s stock, worth over $95 billion, and no major investors have publicly called for his removal. However, former Tesla shareholder and investment manager Ross Gerber has recently voiced support for Musk stepping down.
The Need for New Leadership
Tesla remains a highly valued company, trading at more than 100 times its earnings—a stark contrast to traditional automakers like Ford, GM, and Toyota. This suggests that investors are still betting on Tesla’s long-term dominance in the EV and autonomous driving sectors. However, many analysts believe that fresh leadership could help Tesla regain its momentum.
“A new CEO for Tesla would be the best thing for the company right now,” says Matthias Schmidt of Schmidt Automotive Research. He believes that replacing Musk would mitigate the “toxic contagion” surrounding the company and allow a dedicated leader to focus on Tesla’s core business.
A Pivotal Moment for Tesla
Tesla finds itself at a crossroads. While it remains the dominant force in the EV industry, its future is uncertain. Competition is intensifying, sales are declining, and Musk’s political entanglements are alienating potential customers. At the same time, Tesla’s focus on autonomy, while promising, has yet to yield the results investors and consumers expect.
The key question remains: Can Tesla continue its success with Musk as its CEO, or does the company need new leadership to navigate the challenges ahead? The coming months will be crucial in determining whether Tesla can maintain its position as a market leader—or if its competitors will seize the opportunity to surpass it.
The Information is Collected from BBC and AOL.
