Leaked report reveals shocking downfall for Tesla — here's what's driving the drop in sales

Tesla shareholders recently got some bad news. According to Electrek, the electric vehicle giant is expected to ship the fewest number of vehicles in the first quarter of 2025 since Q3 of 2022.

What's happening?

Tesla is projected to deliver 359,000 units in Q1 2025, according to a Kalshi prediction market cited by Electrek. While that might sound like a lot, it's not for Tesla, and this may be part of a growing trend. Tesla sales have been declining worldwide, especially in Europe. 

According to numbers recently released by the European Automobile Manufacturers Association, Tesla vehicle registrations in the European Union and several other European countries dropped by about 45% between January 2024 and 2025, as NPR reported. Sales are down in Germany by a staggering 70% through February for year-over-year data, according to Electrek.

Maybe even more concerning for Tesla is what's happening in China. China accounts for more than a third of global sales for Tesla, and it leads the world in total sales of electric and hybrid vehicles, but Tesla saw sales there drop by 11.5% in January, Inside EVs detailed.

In California, the largest EV market in the U.S., Tesla registrations dropped nearly 12% from 2023 to 2024 even while overall EV sales grew in the state, per Electrek.

Why is this important?

While Tesla sales may be down, global EV sales continue to grow and are expected to continue to do so, according to Statista. It appears as though, for one reason or another, consumers are choosing to go with other brands. Some of that was bound to happen to any company boasting sales of around 60% in its industry — about where Tesla was for the U.S. as recently as 2023, per a New York Times data chart — but the slide appears to be greater than most analysts would have likely expected at that point in time. 

Sales in California are a good indicator of this slip. As mentioned, Tesla saw a significant drop in the state last year, but overall EV sales were still up 1.2%. Remove Tesla from that equation and non-Tesla EV sales increased by 20% from January 2023 to January 2024, per Electrek.

So, while this may be bad news for Tesla, it's not necessarily bad news for the world's transition away from gasoline and diesel engines, which are relatively inefficient and produce several times as much carbon dioxide pollution per mile, according to Recurrent. 

More and more people are upgrading to an EV and rejecting gas-powered vehicles that produce planet-warming pollution, which in turn causes more extreme weather events that threaten lives and the global food supply.

What's being done about this?

Tesla has been fairly quiet about the slumping sales, and some Tesla supporters believe sales have simply stalled due to the upcoming Model Y changeover. It could also be because there are now more EVs available than ever to consumers. 

Others say the sharp decline in Tesla sales is at least partially due to CEO Elon Musk's activity in U.S. and world politics. Those political efforts have been polarizing among U.S. citizens, with a general theme of aiming to dismantle U.S. government services and reduce the federal workforce while implying the country has a problem with a "parasite class" who don't earn enough money with their own jobs to avoid requiring help from any healthcare or retirement services. 

Some agree with that perspective and have said they support him more for it — with President Donald Trump saying he plans to buy a Tesla as a result — while others have said it drives them away from supporting a company Musk runs. 

One person commented on the Electrek article, "I'm the perfect example of the problem that Tesla is facing. I like EVs. I buy new cars. I'm the car buyer in a multi-driver family. MY most recent car purchase was a Hyundai Ioniq 5. Why? Elon Musk. As long as he's in charge I'll NEVER buy a Tesla."

Several dozen readers liked this comment or posted to agree with it, though the drop in sales began before Musk took an active role in government this year, so it can't be entirely attributed to any one factor either. If Musk decided to step away and divest from Tesla, that may be the only way to have a pure view at the brand's success on its own — which, by most data-driven accounts from user satisfaction surveys and car reviews by experts, has been high. 

In the meantime, Tesla may need a win soon to turn its fortunes around, as the company's stock has plummeted from a 52-week high of $488.54 to under $250 this week. 

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