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Tesla reported a 13% decline in first-quarter vehicle deliveries on Wednesday, citing production slowdowns due to factory upgrades and growing backlash over CEO Elon Musk’s ties to President Donald Trump’s administration.
The electric vehicle (EV) manufacturer delivered 336,681 cars in the quarter ending March 31, falling short of analyst expectations. The company attributed the shortfall to the “loss of several weeks of production” as it upgraded facilities to ramp up Model Y output.
Following the announcement, Tesla’s stock dropped more than 6% in early trading before recovering some losses later in the day.
Concerns Over Musk’s Leadership and Brand Impact
The weaker-than-expected sales have amplified concerns over Musk’s leadership at Tesla, as the company faces increasing consumer boycotts and incidents of vandalism. The criticism has intensified as Musk has played a key role in engineering significant job cuts across various U.S. government sectors under the Trump administration.
Dan Ives, a Wedbush Securities analyst and longtime Tesla supporter, described the quarterly results as “a disaster on every metric.”
“It’s a fork in the road moment,” Ives stated in a note to clients, urging Musk to clarify how he is balancing his Tesla responsibilities with his political engagements.
“The more political he gets… the more the brand suffers, there is no debate. This quarter was an example of the damage Musk is causing Tesla,” he added.
Ives emphasized that this period represents “a moment of truth” for Musk as he attempts to navigate what he called a “brand tornado crisis” and steer Tesla out of its current challenges.
Tesla Sales Struggle Amid Cybertruck Recall
Tesla did not break out specific sales figures for the Cybertruck in its earnings report, but overall delivery numbers suggest weak demand for the futuristic pickup, which Musk has enthusiastically promoted.
The vehicle’s rocky rollout was further complicated in March when Tesla recalled nearly all Cybertrucks due to a defect that could cause an exterior panel to detach, creating a potential crash risk.
Tesla did not provide a breakdown of deliveries by region, but data from national automotive authorities indicate significant sales declines across Europe, where Musk’s association with Trump has been met with strong criticism.
In March alone, Tesla’s sales plummeted by more than one-third in France and nearly two-thirds in Sweden. In Denmark, sales fell by 56% in the first quarter.
Tesla Investor Frustration Over Performance
Tesla shareholder Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management and a vocal critic of Musk’s leadership, did not hold back his frustration, taking to X (formerly Twitter) to express his disappointment.
“These numbers suck,” Gerber posted. “The Cybertruck is basically not selling. The brand is broken and may not be fixable. The board of directors is 100 percent responsible.”
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