Elon Musk’s Tesla faces continuous sales slump: EV giant reports 13% drop in deliveries

Elon Musk-owned Tesla has reported a sharp decline in vehicle sales for the first quarter of 2025, signalling ongoing challenges for the electric vehicle (EV) manufacturer as it faces mounting competition, an ageing product lineup, and shifting consumer sentiment.

Tesla's Q1 deliveries decline

It is noteworthy that the American company delivered 336,681 vehicles worldwide between January and March, representing a 13 per cent drop compared to the 387,000 units sold during the same period last year. The decline comes despite aggressive price cuts, zero-interest financing offers, and other promotional incentives aimed at boosting demand.

The latest figures fell significantly short of analysts’ expectations. Market analysts polled by FactSet had projected deliveries to reach approximately 408,000 vehicles, highlighting the growing gap between investor forecasts and Tesla’s actual performance.

Rising competition and market challenges weigh on Tesla’s sales

Industry experts point to several factors contributing to the sales decline. While Tesla once dominated the EV market, it now faces fierce competition from both legacy automakers and newer entrants offering a wider range of electric models. Companies such as BYD, Ford, and Hyundai have ramped up their EV production, providing consumers with more choices at competitive prices.

It was reported earlier this week that Tesla's sales in France and Sweden declined for the third consecutive month in March, marking the lowest first-quarter figures in both countries since 2021, according to a Reuters report. The drop comes amid the ongoing Tesla Takedown protests across the United States and Europe.

The electric vehicle maker, has faced backlash due to Musk’s reported support for far-right political groups in Europe. This controversy has contributed to weaker demand ahead of the highly anticipated launch of the new Model Y mid-size SUV.

Analysts suggest that consumer sentiment in key European markets like France and Sweden serves as a crucial indicator of Tesla's global first-quarter performance and overall brand perception.

(With inputs from Bloomberg and Reuters)