Tesla, the electric vehicle giant traded on NASDAQ under the ticker TSLA, has found itself under intense scrutiny during the current year. One of the pressing questions that analysts and investors alike have been grappling with is the performance of Tesla's first-quarter deliveries. Despite optimistic forecasts, multiple reports have indicated that this quarter could be particularly challenging for the renowned automaker, leading to a downward revision of delivery estimates by various analysts. Ultimately, Tesla's deliveries for the first quarter totaled just under 337,000 vehicles. This figure fell short of Wall Street's expectations, signifying a 13% decline compared to the previous year, marking the lowest delivery figures since 2022.

The decline in deliveries can largely be attributed to increasing competition in the electric vehicle market and the perceived negative influence of Tesla's CEO, Elon Musk, particularly due to his involvement with the Department of Government Efficiency (DOGE). As of early April 2023, Tesla's stock price had already dropped more than 35% this year, and analysts cautioned that the stock could continue to decline further.

Feeling the Pressure from All Sides

Tesla's primary business focus has always been the production and sale of electric vehicles, but the company is currently experiencing significant pressure from various fronts. While electric vehicle sales in general have been on the rise, Tesla has reported a decline in sales specifically in critical markets such as Europe and China. This downturn is largely attributed to the growing competition in the electric vehicle sector. A noteworthy competitor is BYD, a Chinese electric car manufacturer that has been gaining market share rapidly. In 2024 alone, BYD accounted for an impressive 32% of all new electric vehicle sales in China, while Tesla's share was slightly over 6%.

Additionally, another factor complicating Tesla's situation is Elon Musk's prominent involvement with DOGE and his increasingly vocal stance in political matters. Initially, it was difficult to determine the extent of the impact of Musk's political commentary on Tesla's performance, but as time has passed, analysts and major investors have started to connect the dots. They are increasingly convinced that Musk's dual role at DOGE and his frequent political posts have contributed to Tesla's recent struggles.

Recent data gathered by the car shopping platform Edmunds indicates a troubling trend: Tesla owners are trading in their vehicles for new or used cars from other dealerships at unprecedented rates since Musk began his involvement with DOGE. Moreover, reports of vandalism targeting Tesla vehicles could also be dissuading potential buyers and existing owners from keeping their Teslas.

Investor sentiment is understandably tense at this juncture. Ross Gerber, a notable early investor in Tesla, expressed his concerns in a post on X, stating, "The Tesla brand is severely tainted at this point. Damage is done." Following the disappointing delivery results, Dan Ives, a long-time Tesla bull and analyst at Wedbush, acknowledged the situation, describing it as a "brand tornado crisis moment," while still maintaining a long-term bullish outlook on the company.

There have been circulating media reports suggesting that Musk might consider stepping back from his role with DOGE. However, both Musk and representatives from the White House were quick to dismiss these claims within hours of the initial report. Before taking on responsibilities at DOGE, there were already concerns about Musk's ability to effectively manage his role as CEO of Tesla alongside his leadership of other prominent companies like X (formerly known as Twitter) and SpaceX. These concerns have become increasingly amplified as Tesla's performance continues to falter.