Elon Musk’s Political Controversies Ignite Tesla Crisis as Sales Plunge, Protests Erupt, and Investors Panic—Is the Once-Untouchable EV Giant Now at Risk of Losing Its Market Dominance Due to Its CEO’s Growing Distractions?

decisionOanh · March 23, 2025

Elon Musk: Tesla’s Greatest Asset or Its Biggest Liability?

Elon Musk—a name synonymous with groundbreaking innovation and unmatched ambition. But now, many are asking: Could the very force that built Tesla be the one holding it back?

Tesla is hitting unexpected turbulence, with faltering sales, rising protests, and a shifting public image. As Musk’s personal politics take center stage like never before, his actions are creating ripples not just within Tesla but across the world.

So, what’s really going on behind the scenes? Is the visionary still Tesla’s greatest asset, or has he become its biggest liability? And is Tesla in danger of losing its dominance? Let’s dive in.

Tesla’s Sales Crisis

Tesla’s sales trajectory is trending downward, especially in Europe. The numbers paint a concerning picture:

  • Germany: Down 76% in February

  • France: Down 45%

  • Netherlands: Down 24%

  • Sweden: Down 42%

  • Norway & Denmark: Down 48%

  • Portugal: Down 53%

  • Spain: Down 10%

Outside Europe, similar trends persist.

  • In Australia, Tesla sales fell 71% in February compared to the same month last year.

  • Worldwide, Tesla’s sales of cars produced in China were reportedly down 49%.

  • In the U.S., while sales remain relatively stable, growth has slowed significantly.

  • California, a key market, saw Tesla registrations drop 12% last year, raising alarms about mounting challenges in the U.S.

The Musk Factor: Political Controversies & Investor Concerns

One of the biggest factors behind this downward trend is Musk’s growing political controversies.

When Donald Trump returned to the White House in January, Musk was appointed head of a brand-new government agency, the Department of Government Efficiency, tasked with cutting regulations and streamlining government agencies. However, critics argue that Musk is using this position to benefit Tesla, SpaceX, and his other ventures.

Even some Tesla investors are worried. Many believe Musk’s increasing political focus and close ties to President Trump are distracting him from Tesla’s struggling business.

The controversy isn’t just limited to the U.S. In Europe, where Tesla sales are already declining, Musk’s public support for far-right parties is pushing away more customers:

  • Germany: Musk has backed the far-right AfD Party.

  • UK, Italy, Romania: He has used his social media platform, X, to promote right-wing figures.

  • Additionally, he has been accused of making a Nazi-like salute on stage, sparking outrage.

Protests & Public Backlash

The backlash is growing. Protests have erupted across the U.S. and Europe:

  • U.S. protests: Demonstrations at Tesla showrooms in New York, Palo Alto, St. Louis, Chicago, Portland, and Boston.

  • International protests: Protests in Barcelona, London, and Lisbon.

Demonstrators argue that Musk’s alignment with Trump and far-right figures contradicts Tesla’s mission. His anti-union stance is also drawing criticism, with many workers feeling betrayed.

One protester stated:

“The way to reach and hurt someone as reactionary and dangerous as Elon Musk is to put financial pressure on him. Stop buying Tesla and sell your Tesla shares.”

Tesla’s Stock Takes a Hit

The protests are having an impact. Tesla’s stock price has tumbled, with the company’s market value falling 45% since reaching a record high of $1.5 trillion in December 2024. This decline prompted President Trump to step in and publicly support Musk.

Trump: “I’m going to buy a Tesla. It’s a great product, and Elon has been treated very unfairly.”

Trump’s endorsement helped Tesla’s stock recover slightly, but the company’s struggles are far from over.

Tesla Losing Market Share

Tesla is also losing its dominance in the EV market:

  • China’s BYD has overtaken Tesla as the world’s largest EV seller.

  • Legacy automakers like Volkswagen, BMW, Stellantis, and Renault are aggressively expanding EV production in Europe.

  • In North America, Ford and General Motors are pricing their EVs lower than Tesla.

To stay competitive, Tesla has been forced to slash prices and offer hefty discounts. However, this is now squeezing profits:

  • Tesla’s Q4 profit margin from vehicle sales fell to 13.6%, raising concerns among investors.

Can Tesla Recover?

Tesla is at a crossroads. Once the undisputed EV leader, it now faces shrinking sales, growing competition, and a brand in turmoil. And with Musk diving deeper into politics, investors are questioning where his focus truly lies.

To counter its global sales slump, Tesla is turning to new markets—particularly India.

  • After years of failed attempts, Tesla is finally making a serious push into India, leasing a flagship showroom in Mumbai, with a second in Delhi already planned.

  • Given Indian Prime Minister Narendra Modi’s close relations with President Trump, Musk’s political leanings may not harm Tesla’s image in India.

The Road Ahead

With the India test ahead, can Musk still steer Tesla through its biggest challenge yet? Or will his own political distractions drive away customers, investors, and Tesla’s future?

One thing is for certain: the biggest risk to Tesla might not be the competition, but Elon Musk himself.

Phuong Luu