Tesla’s Troubled 2025 Outlook

The word Tesla has been synonymous with EVs for the past 15 years, with the company’s sales being a key driver to industry growth worldwide. However, after years of positive growth Tesla reported a 1% drop in its EV sales from 2023 to 2024. Following this, the emerging picture of Tesla in 2025 remains muddied with some negative signs.

Tesla January sales, a taster of what is to come?

Tesla’s January 2025 sales figures contracted almost across the board. Its European sales were down ~47%, while the region’s total BEV market was up ~33%. Within Europe some of its historic largest markets including France, Germany, the UK and Belgium were down by up to ~63%.

In China its sales were down ~15% compared to the total BEV market being up ~16%. While in North America Tesla’s sales increased ~11%, this is markedly slower growth rate compared to the total BEV market which increased ~34%. However, when considering just Canada, Tesla monthly sales dropped 41% compared to the Canadia BEV market which increased ~14%.

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Falling sales and a falling share price

When Trump won the election in November 2024, there was excitement on financial markets as to what Musk’s position in the Trump Administration may do for Tesla as a company. However, since the start of 2025, much of this excitement has waned and Telsa’s share price has dropped 34%, making it the second worst performer on the S&P500 YTD (January to March).

In total Tesla saw an 11% drop in sales in January 2025 compared to 2024. Considering average regional prices of a Tesla this equates to over USD582 million of potential lost pre-tax earnings. Although in many recent earnings calls Musk has stated that Tesla is much more than an EV brand, the majority of Tesla’s earnings still come though car sales. If the trend of falling sales continues it threatens overall profits for the year substantially.

What role does Musk have to play in all of this?

Many have pointed the finger at CEO Musk for the reason of falling Tesla sales. His place in Trump’s Administration as head of DOGE is a divisive one, many now see him as polarising character that is doing damage to the Tesla brand. An example seen recently was the city of Toronto scrapping its EV incentives specifically for new Tesla taxis and no other automaker.

Although, it is early to suggest that Musk is the primary driving factor for falling sales, the Tesla brand and Musk are closely intertwined, it will certainly play a significant role in 2025.

More information

This information comes from Rho Motion’s EV and Battery database click here for more details.

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Source: https://rhomotion.com/news/teslas-troubled-2025-outlook/