Tesla investors expect an unpredictable year ahead because the electric vehicle manufacturer must overcome ongoing sales challenges and damage to its corporate reputation. Elon Musk promised Tesla would achieve growth in 2025 following its first yearly sales decrease in 2024. Recent developments indicate the original target has become increasingly difficult to achieve.
The company experienced its worst quarterly delivery performance in the past three years following a 13% decrease because of worldwide protests against Musk’s right-wing political stance and his advisory work under Donald Trump’s administration. The escalating protests against Tesla assets through vandalism have created doubts about the brand’s reputation as well as customer trust.
Gene Munster from Deepwater Asset Management analyzed recent brand damage for the first time and predicted Tesla will deliver 9% fewer vehicles by 2025 compared to its 1.79 million units from last year. The analysts at Deutsche Bank predict a 5% sales decline for Tesla because of its outdated product range and intense market competition across Europe and China.
Investors doubt Tesla’s plans to launch a budget model even though the company recently updated the Model Y and continues to face market skepticism. Analysts predict that a basic version of an existing Tesla model will not draw new customers nor boost declining profit margins.
The company faces additional difficulties due to anticipated battery material tariffs that Morningstar predicts will increase production costs by 10%. Musk faces criticism for his involvement with the Department of Government Efficiency (DOGE). The public’s mounting anger has led to demonstrations that recently took place near San Francisco during the weekend.
The future remains uncertain for Tesla investors because stock values have dropped 45% since December while the company lacks specific dates for its new vehicle introduction.
