Tesla is bracing for a rough earnings report. Analysts anticipate the company will announce a drop in quarterly profit, sliding below the $1.1 billion it earned during the same period last year. For the world’s most valuable automaker, the numbers underscore a deeper issue: Tesla is facing not just market headwinds, but a brand identity crisis—one centered around its outspoken CEO.
Elon Musk’s growing involvement with the Trump administration, including his controversial leadership of the Department of Government Efficiency, has drawn fire from critics and even some loyal customers. Once a darling of environmentalists and centrists, the Tesla brand is increasingly polarizing. Vandalism and protests at Tesla dealerships have cropped up globally, and sales have dipped as some consumers seek alternatives.
Competition has also ramped up. Chinese manufacturers like BYD, along with traditional automakers such as GM, Volkswagen, and Hyundai, continue to erode Tesla’s market share with a wider range of electric vehicle offerings. Tesla’s global sales fell 13 percent in Q1 2025 compared to the same quarter last year. After peaking at 1.8 million vehicles sold in 2023, the company managed only 1.7 million in 2024—a trajectory far from its previously stated goal of 20 million units annually by decade’s end.
The Cybertruck, billed as Tesla’s boldest innovation in years, appears to be underperforming. Sales of the vehicle plunged by about 50 percent compared to the previous quarter, despite Tesla offering up to $8,500 in discounts. With a base price of $70,000, even before incentives, the truck has yet to find its footing.
Tesla’s promises of a lower-cost electric vehicle by mid-2025 remain vague. No prototype has been shown, and insiders speculate the car may simply be a scaled-back version of the Model 3 or Model Y. The absence of clear details is compounding investor anxiety.
Adding to the uncertainty is Tesla’s reliance on imported parts, many of which now face new tariffs under Trump’s trade policies. While its U.S. factories in California and Texas shield the company from some of the impact, supply chain pressure could force Tesla to choose between higher prices or tighter margins.
Musk has pointed to artificial intelligence and autonomous driving as Tesla’s future. But rivals like Waymo are already running paid robo-taxi services in multiple U.S. cities and testing in international markets. With Waymo logging over 200,000 paid rides weekly, Tesla’s Cybercab vision is starting to look like it is stuck in neutral.