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Major blow for Elon Musk and Tesla: this wasn’t expected, and now it’s becoming clear

Elon Musk, amid political controversies and technological failures, faces an unprecedented challenge with Tesla in the US

Tesla remains the leader in electric vehicle sales in the United States, but its dominance is at risk. Despite keeping a strong presence, the numbers in recent quarters show a significant drop in revenue and profits. In the last three months, Tesla's revenue fell by 12% to $22.5 billion.

Profits also decreased by 23%, which has disappointed LSEG analysts. The drop in the company's stock value has been even more pronounced: since December, the company has seen a decrease of more than 36%. This marks a worrying shift in Tesla's financial direction, which wasn't foreseen by Elon Musk.

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Elon Musk faces an economic crisis at Tesla | Europa Press, Pexels

Is Elon Musk a key factor in Tesla's crisis?

Beyond the numbers, one of Tesla's biggest challenges seems to be related to Elon Musk. The billionaire, who also leads other companies like SpaceX, has caused growing distance from both the political right and left. His brief stint as an advisor to Donald Trump left visible scars, and the protests organized by the Tesla Takedown group in California are just one example of the growing public distrust.

To make matters worse, Musk has shown an increasingly ambitious approach for Tesla. He is trying to expand Tesla's robotaxi service in Austin, Texas, and dreams of bringing autonomous vehicles to half of the U.S. population by the end of the year. However, progress in this field isn't as fast as was desired.

Facade of a car dealership with two electric cars parked in front.
Musk's political life affects Tesla | Tesla

The robotaxi service needs human supervision and the company hasn't achieved major progress compared to competitors like Waymo, Google's subsidiary. It already operates with autonomous vehicles in several cities.

Public distrust and legal pressure

The outlook is getting even more complicated for Tesla with the legal pressure the company faces. The National Highway Traffic Safety Administration (NHTSA) is investigating the safety of the full self-driving system in adverse weather conditions. Added to this are lawsuits in Miami and Oakland, where Tesla is accused of exaggerating the capabilities of its autopilot.

58% of Americans have an unfavorable opinion of Musk, according to a survey by Nate Silver. This distrust has led to growing activism against Tesla, with protest events organized every week. The situation is getting more complicated for the leading electric vehicle brand, which is trying to transform its image and offer innovative solutions in artificial intelligence.

Tesla is betting on a transition toward a global artificial intelligence and automation company. But today, amid falling sales, image problems, and legal scandals, Tesla faces a more uncertain outlook than ever.