Tesla sales slump as pressure piles on Musk

New York, United States (AFP) April 2 - Tesla's worldwide sales tumbled in the first quarter, piling further pressure on CEO Elon Musk who faces a growing backlash for his role overseeing US federal spending cuts under President Donald Trump.

Musk's electric vehicle company delivered 336,681 autos globally in the first three months of 2025, a drop of 13 percent, figures showed Wednesday.

(FILES) A Tesla Store in Clermont, Florida, on March 29, 2025. Tesla reported a 13 percent drop in first quarter auto sales April 2, 2025, amid lower production during factory upgrades and blowback over CEO Elon Musk's work for President Donald Trump's administration. Musk's electric vehicle company delivered 336,681 autos in the quarter ending March 31, missing analyst expectations, as it pointed to the "loss of several weeks of production" while it ramps up upgrades for its Model Y output. (Photo by Miguel J. Rodriguez Carrillo / AFP)

The quarterly figures were the lowest in nearly three years and lagged analyst expectations, as Tesla pointed to the "loss of several weeks of production" while it ramps up upgrades for its Model Y output.

Tesla shares initially fell more than six percent, but they bounced following a news report that Trump will soon scale back Musk's involvement in his administration.

Musk, the world's richest person, donated more than $270 million to Trump's 2024 presidential campaign.

Trump tasked Musk with leading the "Department of Government Efficiency" or DOGE, which has slashed the federal workforce and moved to shut down swaths of the US government.

DOGE has become a lightning rod over its murky legal standing and questions about Musk's conflicts of interest and public accountability as an unelected figure driving radical change.

Since Trump returned to the White House, Tesla has been targeted for consumer boycotts and vandalism as its chief executive has helped engineer thousands of job cuts across the US government while aggressively attacking Trump critics on the Musk-owned X social media platform.

Wedbush's Dan Ives, a prominent technology analyst and longtime believer in Tesla's growth potential, called the figures "a disaster on every metric," according to a note.

"It's a fork in the road moment," said Ives, who has called for Musk to publicly outline how he is balancing his Tesla commitments with his work for Trump.

"The more political he gets... the more the brand suffers, there is no debate. This quarter was an example of the damage Musk is causing Tesla," he added, calling early 2025 "a moment of truth" for Musk and his car company.

Ives and other long-term Tesla bulls have viewed the EV maker as poised for potentially massive growth, viewing Musk as a guru in state-of-the-art autonomous driving and artificial intelligence technology expected to play a growing role for the foreseeable future.

- Leaving soon? -

Politico reported that Musk will soon retreat from his role with Trump, citing unnamed sources who described frustration within the White House at the Tesla chief's unpredictability.

The article also cited concerns that Musk has become a political liability, noting that a Musk-backed judicial candidate in Wisconsin was soundly defeated by a liberal on Tuesday.

Trump himself signaled a potential change, praising Musk as "amazing" late Monday in the Oval Office.

"I also think he's got a big company to run," Trump added, "and so at some point he's going to be going back. He wants to."

Trump said he expects Cabinet secretaries to succeed with Musk's mission, saying of DOGE, "at a certain point, I think it will end."

Politico quoted sources saying Musk would remain an informal advisor.

While Tesla's release Wednesday did not break out Cybertruck deliveries, the figures suggest anemic sales for the vehicle, which Musk has passionately embraced.

In March, Tesla announced it was recalling essentially all Cybertrucks because of an exterior panel defect.

Tesla also did not specify deliveries by country, but figures from national auto authorities have shown big drops across Europe, where Musk's association with Trump has sparked criticism.

Tesla shareholder Ross Gerber of Gerber Kawasaki Wealth and Investment Management, who has previously called for the board to remove Musk as CEO, slammed the figures on X.

"These numbers suck," Gerber posted. "The Cybertruck is basically not selling. The brand is broken and may not be fixable. The board of directors is 100 percent responsible."

Tesla shares finished up 5.3 percent.