Tesla CEO Elon Musk Faces Challenges Amid Stock Drop and EV Sales Decline

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Tense Times at Tesla

Tesla’s aggressive expansion in robotics coincides with a troubling downturn in its electric vehicle (EV) sales.

The company’s stock has suffered a 41.5% decline this year, attributed to a combination of reduced demand, Musk’s political controversies, and fierce competition from Chinese EV giant BYD.

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In California—Tesla’s largest U.S. market—sales are showing signs of slowing. In San Diego, the state’s second-most-populous county, Tesla sales have dropped by 35%.

This is particularly concerning given that Tesla has long been the leading and most profitable EV brand in the United States.

“For context, last January and February, Tesla sold more vehicles in San Diego—3,687—than it did in the Netherlands, Norway, or Spain.

In the first two months of 2025, the Southern California county sold nearly as many Teslas as Germany, Europe’s biggest car market. Of course, sales have declined steeply there, too,” reports Sherwood News.

Political and AI Competition Challenges

Tesla’s struggles aren’t limited to EV sales. European sentiment toward the brand is also plummeting, primarily due to Musk’s political stances. Additionally, the escalating competition in artificial intelligence (AI) could further impact Musk’s businesses, including X (formerly Twitter), as rival tech giants such as Mark Zuckerberg’s Meta continue to advance in the space.