Ben Kilbey proudly shows off his Tesla Model Y, a pearl-white electric car he and his family have treasured for three years. “This car has been amazing,” he says, reflecting on the vehicle’s performance and the promise of sustainability it represents. However, his admiration for the company is now overshadowed by his disapproval of Tesla’s CEO, Elon Musk, particularly his handling of layoffs involving U.S. government employees.
Ben, a staunch advocate for sustainable businesses, recently made the difficult decision to part ways with his Tesla, a move spurred by his concerns over Musk’s actions. “I dislike polarization and believe in treating people with kindness,” Ben explains. “There are ways to handle decisions without alienating or belittling others. I strongly oppose such behavior.” His decision is part of a growing trend of customers distancing themselves from Tesla due to Musk’s controversial actions, both in business and in politics.
Tensions Rise Amid Musk’s Political Involvement
Ben is not alone in his frustrations. Musk’s increasingly active role in politics has sparked backlash from loyal customers and critics alike. His leadership of the Department for Government Efficiency (DOGE) has drawn sharp criticism, particularly after his aggressive stance on federal spending cuts. Musk’s involvement in global politics has also raised eyebrows—especially his endorsements of the far-right Alternative für Deutschland (AfD) party in Germany and his online attacks against British political figures, including Prime Minister Keir Starmer.
As Musk’s political influence expands, Tesla faces mounting protests. Demonstrations have erupted at dealerships in the U.S., Canada, the UK, Germany, and Portugal. While many of these protests remain peaceful, some locations have seen acts of vandalism, with Tesla vehicles, showrooms, and charging stations targeted. In separate incidents in France and Germany, Tesla cars were set ablaze, adding to the tensions surrounding the brand.
In the U.S., the Tesla Cybertruck has become a focal point for the backlash. Social media posts show the vehicle covered in graffiti, trash, and even used as a makeshift skateboarding ramp. Former President Donald Trump, however, defended Tesla, inviting the company to display its cars at the White House and vowing to purchase one, calling the acts of vandalism “domestic terrorism.” Musk, in turn, denounced the violence, stating, “This level of violence is insane and deeply wrong. Tesla simply makes electric cars and does not deserve these attacks.”
Tesla’s Market Position Faces Pressure
Despite the growing controversies, the impact on Tesla’s business remains uncertain. While the Tesla Model Y was the best-selling car worldwide last year, the company saw a slight dip in overall sales, from 1.81 million to 1.79 million units—the first such decline in over a decade. While modest, this decrease has raised concerns for a company built on aggressive growth, with profits also taking a hit.
Tesla’s struggles are especially evident in Europe. New registrations of Tesla vehicles fell by 45% in January compared to the same month in 2024. While the UK saw a 21% increase in sales, major European markets and Australia experienced further declines. In China, where Tesla manufactures vehicles for both domestic and international markets, shipments dropped by over 49% that same month.
Joseph Spak, a Wall Street analyst at UBS, recently predicted a 5% decline in Tesla’s global sales for the year, defying market expectations of a 10% growth. His analysis contributed to a sharp 15% drop in Tesla’s stock price in one day, part of an overall 40% decline since the start of the year.
Research from brand monitoring firm Morning Consult Intelligence shows that Musk’s actions have negatively affected Tesla’s reputation, particularly in the EU and Canada. In the U.S., opinions are divided, with some consumers supporting DOGE’s government spending cuts. However, the study cautions that Musk’s actions may be alienating high-income consumers—those most likely to purchase electric vehicles.
Competition and Innovation Stagnation
Tesla’s troubles extend beyond Musk’s controversial actions. The company’s once-innovative vehicle lineup now faces stiffer competition. The Model S, launched in 2012, and the Model X, introduced in 2015, remain on sale with minimal updates. Even the newer Model 3 and Model Y are beginning to feel outdated in a rapidly changing market.
“Their lineup hasn’t seen major updates recently,” says Stephanie Valdez Streaty, an industry expert at Cox Automotive. “Aside from the Cybertruck, which is a niche product, they haven’t released anything fresh. Meanwhile, the competition is surging ahead.”
Professor Peter Wells from Cardiff University shares a similar view: “Tesla hasn’t demonstrated the level of innovation expected. Elon Musk should have prioritized expanding and updating the product range. That’s a key issue.”
Traditional automakers have invested heavily in electric vehicle development. Brands like Hyundai and Kia have earned strong reputations for quality EVs, while Chinese manufacturers, including BYD, Xpeng, and Nio, are gaining ground by offering advanced features at competitive prices.
“China’s EV incentives are substantial,” says Valdez Streaty. “Companies like BYD are growing rapidly, not just in China but worldwide. This poses a major challenge for Tesla and other established manufacturers.”
In March, BYD unveiled an ultra-fast charging system capable of delivering 250 miles of range in just five minutes—far outpacing Tesla’s Supercharger network.
The Robotaxi Gamble and Leadership Questions
Musk continues to push forward with Tesla’s ambitions for autonomous vehicles. He recently claimed that a robotaxi service would launch in Texas by June, although such promises have been made before. In 2019, Musk predicted that a million Tesla vehicles would operate as autonomous taxis within a year. However, Tesla’s “Full Self-Driving” feature still requires human supervision.
“Every year, Musk promises autonomous cars are just around the corner, but they never quite arrive,” says Jay Nagley, an expert from Redspy Automotive Consultancy.
Leadership concerns have also come to the forefront. Musk juggles multiple high-profile ventures, including social media platform X, AI firm xAI, and SpaceX, which has recently faced setbacks with its Starship rocket program. When asked about balancing these responsibilities, Musk admitted, “With great difficulty.”
“It’s unclear how much time Musk dedicates to Tesla,” says Professor Wells. “If he’s making key decisions, they need to be the right ones. Tesla requires someone fully committed to the automotive industry.”
Despite these criticisms, Musk’s grip on Tesla remains strong. He still holds a 13% stake in the company, valued at over $95 billion, with major investment firms such as Vanguard and BlackRock holding comparable shares. Tesla’s valuation remains nearly 30% higher than it was a year ago, despite recent stock declines.
Calls for Change in Leadership
Tesla’s current market value is over 100 times its earnings—significantly higher than rivals like Ford, General Motors, and Toyota. This suggests investors are still betting on Tesla’s dominance in electric vehicles or its success in autonomous driving.
“Tesla is either expected to dominate EVs—unlikely, given Chinese competition—or lead in self-driving technology,” says Nagley. “Neither scenario seems guaranteed.”
Though major investors have not yet called for a leadership change, some critics are growing more vocal. Ross Gerber, a long-time Tesla investor, recently urged Musk to step down. Analysts also argue that new leadership could benefit the company.
“A new CEO would be the best move for Tesla,” says Matthias Schmidt of Schmidt Automotive Research. “It would help address Musk’s political baggage, eliminate conflicts of interest from his DOGE role, and provide focused leadership.”