Tesla's horrendous first quarter numbers have some of its backers rethinking a few things. Namely, their CEO Elon Musk, whose once immense starpower is now inverting on itself.
Still haunted by last year's sales slump — the first annual drop in its history — Tesla has kicked off 2025 with a worrying omen that it may repeat the unwanted feat: a 13 percent drop in first-quarter deliveries. As the company faces widespread protests fueled by anti-Musk sentiment, the diagnosis is obvious.
"This is our first look at the impact of recent brand damage — and it appears to be the primary driver behind this quarter's delivery decline," Deepwater Asset Management managing partner Gene Munster wrote on X, as spotted by Reuters. "These growth rates will likely deteriorate further this quarter." Annual deliveries, Munster predicts, will slip by 9 percent.
"I estimate brand damage cost Tesla around 80k deliveries in the quarter," Munster added in another tweet.
The problems are very much material, too. Musk made a big and brash gamble with the Cybertruck, a heterodox pickup truck with bold styling and an exorbitant price tag. And less than 50,000 of them have actually shipped — nowhere near the 250,000 units sold that Musk promised investors before the stainless steel trapezoids started rolling off the lot last year.
To some fans and investors, the big Cybertruck push was a slap in the face. They had long begged Musk for a small, affordable Tesla that could sell in high volumes. Instead, what they got was a vehicle that weighs 7,000 pounds and costs upwards of $80,000. Even if the fabled affordable EV does come, investors don't sound confident that Tesla will nail it. Gary Black, managing partner of Tesla shareholder The Future Fund, worries that if the cheaper vehicle is simply a barebones version of an existing model, this year's deliveries and profits "will go much lower," he told Reuters.
The rest of the Tesla lineup, meanwhile, is no longer as titillating in a market full of exciting EV options.
Tesla is also getting smoked by its Chinese competitor BYD, which recently usurped Musk's company as the world's largest EV automaker, selling over 4 million vehicles and raking $100 billion in revenue in 2024. Tesla sold 1.79 million and took in $97.7 billion over the same period.
It's impossible to ignore what Musk has recently positioned as Tesla's next big thing: the robotaxi business. At the unveiling event of a "Cybercab" prototype last year, Musk dubiously promised that pivoting into offering self-driving cabs would rake in trillions of dollars. But as the company struggles to refine its existing autonomous driving software options like Full Self-Driving, there's immense uncertainty over when — if ever — it can start rolling out such a vision.
All the while, the mere act of driving around in a Tesla has become stigmatized in a way that would've been unthinkable just a few years ago. Tesla cars and dealerships alike are being targeted with vandalism, while owners are ruthlessly mocked.
The degree of hate has surprised even Tesla skeptics. JPMorgan analyst Ryan Brinkman, who has long been bearish on the company, said in a report Friday that first quarter deliveries confirm the "unprecedented brand damage we had earlier feared."
But "if anything," Brinkman added, "we may have underestimated the degree of consumer reaction."
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Tesla Investors Suddenly Terrified as They Realize Musk Has Dug Their Grave
