New data reveals that Tesla’s sales troubles are no longer confined to overseas markets but have now spread to the US. Tesla’s EV registrations fell sharply in April, while competitors like General Motors and Ford are reshaping the American electric vehicle landscape. The decline is compounded by political controversies surrounding CEO Elon Musk, creating additional headwinds for the brand.
Sharp Drop in US Registrations
According to S&P Global Mobility, Tesla’s US electric vehicle registrations fell 16% year-over-year in April to 39,913 units. This marked the first year-over-year decline in overall EV registrations since February 2024, with the broader EV market shrinking 4.4% in April. Tesla’s drop was notable, as every model except the Model 3 experienced sales declines, impacted by the switchover to the new Model Y which caused temporary production shutdowns globally.
Competitors Gain Ground
While Tesla’s numbers dipped, rivals seized the opportunity. General Motors saw Chevrolet’s EV registrations surge 215% in April, propelling it to second place. GM’s luxury Cadillac brand also showed strong growth, with registrations up 104% thanks to models like the Lyriq and Optiq. Ford, however, saw its own EV sales decline by 33%, dropping it to third place in the rankings.
European Market Also Weakens
Tesla’s struggles are even more severe in Europe. Data from the European Automobile Manufacturers Association (ACEA) showed a 49% drop in European EV registrations in April, totaling 14,228 units. In May, France’s PFA national auto lobby reported a 67% year-over-year decline in Tesla registrations to just 721 units. Similarly, Sweden’s Mobility Sweden reported a 53.7% fall to 503 units in May.
Political Controversies Impact Brand Image
Beyond competitive pressures, Tesla’s brand has been impacted by political controversies involving CEO Elon Musk. His public alignment with right-wing politics, leadership of the Department of Government Efficiency (DOGE), and support for former President Trump have alienated some consumers. At the same time, Musk’s recent criticism of Trump’s budget bill has triggered backlash from the political right, further complicating Tesla’s brand positioning.
Loss of Incentives and Tax Credit Concerns
In the US, concerns over potential loss of federal EV tax credits have also weighed on Tesla. Musk’s confrontations with political leaders have fueled uncertainty around policy support for Tesla buyers, contributing to the recent sales softness. While tensions with the Biden administration have cooled, the damage to Tesla’s market momentum remains visible.
Conclusion
Tesla faces growing challenges on multiple fronts: declining sales, intensifying competition from legacy automakers, and the fallout from CEO Elon Musk’s political activities. As rivals like GM expand their EV offerings and capitalize on shifting market dynamics, Tesla must navigate both operational hurdles and its increasingly complicated public image to maintain its leadership in the EV sector.
