Tesla, once the golden child of the EV industry, is facing some serious bumps in the road. Sales are slipping, the stock price is sliding, and its high-profile CEO, Elon Musk, seems more invested in politics than his flagship company. For the first time in its meteoric rise, Tesla might be in real trouble.
What’s Going On with Tesla?
Let’s break it down.
In 2024, Tesla delivered 1.79 million vehicles—just shy of the 1.8 million sold in 2023. It may not seem like a big drop, but this marks the company’s first-ever annual decline in sales. That’s a red flag, especially since Musk had boldly promised a sharp rebound. Investors didn’t take the news well, wiping out more than 6% of Tesla’s valuation in one brutal trading session.
Falling sales are never a good sign, and for Tesla—a company that has thrived on constant growth—it’s a wake-up call.
Rising Competition, Falling Momentum
Tesla’s challenges don’t stop there. The competition is heating up on all fronts.
- The Chinese Wave
Chinese manufacturers like BYD, Geely, and SAIC are churning out sleek, affordable, and tech-savvy electric vehicles. BYD, for instance, sold 1.76 million EVs in 2024, just behind Tesla’s numbers. At this rate, they could overtake Tesla in 2025, especially in regions like Asia, South America, and Africa, where restrictions are minimal. - Legacy Automakers Are Catching Up
The traditional giants—Ford, GM, Volkswagen, and BMW—are no longer sleeping on the EV revolution. Ford and GM saw double-digit growth in EV sales last year, and European automakers are steadily gaining traction. Tesla, once untouchable, now has to fight for every inch of market share.
Musk’s Plate Is Too Full
Another big hurdle? Elon Musk himself.
Instead of steering Tesla through these turbulent times, Musk is juggling political activism, a role in the U.S. government, and running other ventures like SpaceX and X (formerly Twitter). Customers and investors are starting to wonder: does Tesla still have his full attention?
If Musk can’t focus on Tesla—or if his high-profile antics continue to alienate the company’s eco-conscious, liberal customer base—he may need to hand over the reins to someone who can.
The Path Forward
To regain its footing, Tesla must take decisive action:
- Affordable Cars, Faster
The long-rumored $25,000 Tesla EV could be a game-changer, but plans for it were shelved last year. Without an affordable option, Tesla risks losing ground to competitors with cheaper alternatives. - Stay Grounded Before Reaching for the Stars
Tesla’s big bets on self-driving tech, AI, and robotics are exciting, but they’re long-term gambles. Right now, the focus should be on stabilizing the core business: making and selling great cars.
A Decade of Success, but Now What?
Tesla dominated the last decade, transforming from a scrappy startup to the world’s most valuable automaker. Even today, its market cap dwarfs legacy players like Ford, GM, and Toyota. But no company can afford to rest on its laurels—especially not with falling sales.
If Tesla doesn’t act fast to address its challenges, the road ahead could get even bumpier. The question is, can the company that changed the game find a way to do it all over again?