Tesla's year is off to a brutal start

• Tesla's future looked promising after Trump's win, but the automaker has had a rough start to 2025.
• The EV giant has recently faced protests, vandalism, declining sales, and a plummeting share price.
• Tesla has some potential bright spots ahead, like launching its robotaxi and starting production of its "more affordable" EV.

Tesla's new year kicked off with an ugly surprise when a man detonated a Cybertruck outside the Trump International Hotel in Las Vegas.

If the incident seems far in the rearview mirror at this point, it may be because the company has found itself fighting battles on multiple fronts in 2025.

Three months into the year, things have gotten so rough for the automaker that President Donald Trump publicly came to the defense of CEO Elon Musk, railing against growing calls to boycott Tesla and committing to buy a brand-new car from him in a photo op in front of the White House.

It's a stark change from November.

After actively campaigning for the president for months, Tesla's future initially looked promising under Trump 2.0. Musk was appointed to lead the White House's DOGE efforts, Tesla's stock price soared, and the billionaire said he would use his influence to push for a federal approval process for autonomous driving.

While Musk has lauded DOGE's efforts to slash federal spending, Tesla investors have had far less to celebrate. Since the start of 2025, Tesla has been mired in political backlash from the left over Musk's DOGE efforts and faces declines across several key metrics — not to mention the threat of looming tariffs.

A series of anti-Musk protests and Tesla boycott efforts have erupted across the country. Vandalism incidents have also taken place, including gunshots fired at a Tesla showroom and its vehicles and arrests made over damage from Molotov cocktails. Investigators believe a Tesla supercharger station that was engulfed in flames was an act of arson.

The anti-Tesla movement has led some Cybertruck owners, who now happen to own the automaker's most controversial and conspicuous vehicle, to feel uncomfortable leaving their vehicles unattended. The rising number of incidents has even led some to sell their Teslas out of embarrassment or fear of future incidents.

Others have asked Musk to add extra safety features to the vehicle amid the tensions, such as an AI-powered Sentry Mode or a version of the feature that notifies drivers when it's activated.

Musk downplayed the protests while speaking at CPAC recently, saying the demonstrations had "hardly any people" and didn't have "popular support."

However, as vandalism incidents against Teslas have continued, Musk said on X in response to a video of someone placing stickers on the vehicles that "damaging the property of others, aka vandalism, is not free speech."

Trump, meanwhile, has indicated that he'll label attacks against Tesla dealerships domestic terrorism.

It's not just talk — Tesla's numbers are dropping

Tesla's stock has been clobbered in the process.

The automaker's shares have steadily declined over the last couple of months, plunging 48% since hitting an all-time high in December amid a wider market rally.

At market close on Friday, it was down nearly 40% from the start of the new year.

Some Wall Street analysts are sounding the alarm.

"We struggle to think of anything analogous in the history of the automotive industry, in which a brand has lost so much value so quickly," JPMorgan analysts wrote in a note earlier this week.

Ross Gerber, a longtime Tesla investor who accurately predicted the stock would crash this year, said he didn't foresee the stock rebounding in 2025.

There are also indications that car buyers are pulling away from the brand.

Tesla sales are also down in a number of markets. Tesla sales last month fell 71% year over year in Australia and 76% in Germany, according to the countries' transportation agencies. Norway, Denmark, and Sweden also individually saw Tesla sales in February decline over 40% year over year, according to their respective registration data. In France, Tesla sales last month declined 26% year over year, although they improved from the month prior.

In the US, where Musk's political actions have been praised by Trump and many conservatives while being lambasted by many on the left, January Tesla sales were down 11% year over year, according to S&P Global Mobility.

However, its Model Y continues to be a top seller, and Tesla has so far maintained its leading market share with an estimated 42% of total EV sales in the US.

Then, there's China, where Tesla faces fierce competition from lower-cost EVs produced locally. The number of Teslas manufactured in the country last month decreased 49% year over year, according to the country's transportation authority, and the decline came as its Chinese rival, BYD, saw a 90.4% increase in vehicle sales the same month.

It's bracing for the impact of tariffs, too

While Tesla manufactures many of its EVs in the US, it's far from immune from the effects of Trump's looming trade war.

Tesla warned in an unsigned letter this week to the Trump administration that it could face retaliatory tariffs on exports. It said that "exporters are inherently exposed to disproportionate impacts" when countries react to US trade actions.

It also added that "certain parts and components are difficult or impossible to source" domestically and asked the US to consider a phased approach in their trade actions.

"Trade actions should not (and need not) conflict with objectives to further increase and support domestic manufacturing," Tesla wrote.

Facing the prospect of the federal EV tax credit going away, tariffs threaten to eat into the company's margins as the net cost of purchasing a new Tesla could increase without the subsidy.

Tesla is betting on 2 big launches this year

While Tesla is undoubtedly going through a rough patch, Musk's EV maker is readying two products that have Wall Street excited.

It's also made some moves this year in an attempt to drive sales of its most popular vehicle, the Model Y. Faced with an aging car lineup, Tesla launched the refreshed Model Y, though the company has said ramping up shipments has led to lost production time.

As for the political backlash, some analysts have told BI they believe that demand boils down to the quality of the product. If Tesla delivers best-in-class vehicles, car buyers will bite regardless of who is running the company, some analysts say.

There's some data to suggest there's truth to this. While American's favorability for Tesla has fallen to a 9-year low, according to YouGov's surveys, US consumers polled also indicate that their openness to buying a Tesla hasn't meaningfully shifted overall.

And with two key self-imposed deadlines approaching, the company still has plenty of time to right the ship.

The first is Musk's big bet on autonomy, Tesla's robotaxi service, which he's said will launch in Austin in June. It's the first step toward the eventual launch of its fully autonomous Cybercab. The Tesla CEO has said solving autonomy is key to growing the company's value.

The second, however, may have more of an immediate impact on Tesla's bottom line. The EV maker has said it's on track to begin production of a "more affordable" vehicle in the first half of the year — a product Tesla's retail investors and institutional shareholders have long asked about — which could help Tesla be more competitive in China and attract cash-strapped US shoppers too.

Analysts have told BI that it's "crucial" and "a necessity" that Tesla starts production for its cheaper EV in the first half of the year as promised, which would be June at the latest.

Musk's increasingly split attention amid his foray into politics has some wondering if he may have finally overextended himself — after all, he recently acknowledged that he's running his other companies with "great difficulty."

However, Musk has proven capable of seemingly miraculous turnarounds before.

As Peter Thiel recently put it, "You should never bet against Elon Musk."

But with continued pressure on the stock and a spotty track record with hitting deadlines, investors are now watching to see if the Tesla CEO can navigate through the storm clouds and into blue skies — one more time.