Tesla sales slide as Musk walks tightrope between Trump ties

• Tesla is facing challenges related to U.S. tariff policies. The trade war led by Donald Trump has placed the company in a tough spot. Although Tesla is less impacted by tariffs compared to other manufacturers, the tension is still significant.
• Tesla’s sales fell by 13 percent in the first quarter of 2025. This is the most significant drop in the company's history, impacting stock value, which has plummeted by 44 percent since the beginning of the year.

Due to Trump’s trade war, Tesla, along with other companies, is facing a complex situation. What sets Tesla apart is Musk's close relationship with the American president.

According to CNN, further close cooperation between Musk and Trump might alienate potential customers both domestically and internationally who disagree with Trump’s policies. However, distancing from Trump might lead to tensions with the White House. CNN noted that this precarious position is a trap Musk has inadvertently set for himself.

On Tuesday evening Eastern Time, Musk's company is set to announce its sales results for the first quarter of 2025. The billionaire will also respond to investors' questions.

The car manufacturer is experiencing a drop in sales and damage to its brand image. The Wall Street Journal reported that in the first quarter of 2025, Tesla's global car sales decreased by 13 percent compared to the same period the previous year. According to media reports, this is the largest decline in Tesla's history. Until recently, Tesla enjoyed year-over-year sales growth ranging from 20 percent to 100 percent nearly every quarter, significantly contributing to its high stock prices.

Tesla's stock market value has also suffered. After the presidential elections, stock prices increased as investors hoped Musk's close ties with Trump would lead to favorable policies for the company. Yet, since the beginning of the year, the stock has lost 44 percent of its value.

Compared to other U.S. car manufacturers, Tesla is less affected by tariffs because the company does not import vehicles from its overseas factories and uses fewer foreign parts in U.S. production, CNN noted. As reported by Reuters, after the U.S. announced tariffs on China and in response to Beijing's retaliatory tariffs, Tesla halted some imports from China. The company has also stopped accepting new orders in China for Model S and X vehicles built in California.

Reuters also reported that Tesla is delaying the introduction of its much-anticipated cheaper car model until 2026. It was previously announced that production would begin in the first half of this year. The car is expected to cost around $30,000. This delay may concern investors. On Monday, stocks lost 6 percent of their value following reports of the production delay.

However, as noted by CNN, the enterprise’s financial situation is not the only topic of interest to investors.

Investors are also eager to know Musk’s stance on the 25-percent tariffs on cars announced by Trump and their cost to Tesla, as well as the progress on autonomous Robotaxi cars and details about the plan to sell humanoid robots. Additionally, they may want to know when Musk plans to leave the Department of Government Efficiency (DOGE) and start focusing on solving the company’s issues. DOGE is a government agency led by Musk aimed at reducing federal administrative expenses.

At the beginning of the year, due to Musk’s political involvement and influence on job cuts in the administration, a campaign called Tesla Takedown emerged. Protests have been organizing in front of Tesla showrooms across the U.S. and abroad. Protesters hope their actions will lead to a decline in sales of cars produced by Musk’s company. Musk's support for far-right parties in Europe also fuels the protests and boycotts.

Some participants have committed acts of vandalism, setting Tesla cars on fire, which U.S. Attorney General Pam Bondi condemned as acts of domestic terrorism. Musk expressed astonishment at the attacks and called on the vandals to stop behaving in a manner he described as psychopathic.

In March, Trump and Musk examined five Tesla car models together. Following this, Trump announced he would purchase a red Model S. He also mentioned having already bought a Cybertruck for his granddaughter Kai last year. Having previously criticized electric cars, the president praised Musk’s cars, emphasizing that this presentation supports Musk’s efforts in dealing with criticism and the company's difficulties.