Tesla (TSLA, Financials) shares slipped more than 4% in pre-market trading Thursday after the company reported a 13% year-over-year decline in vehicle deliveries for the first quarter of 2025 — the steepest drop in its history. The stock had closed up 5.3% on Wednesday at $282.76, but fell to $271.39 ahead of the market open.
Tesla delivered 336,681 vehicles during the quarter, missing already-lowered analyst expectations. Production was disrupted at all four of its factories due to a Model Y update, temporarily halting output.
But the production pause is just one part of the story. The company has been navigating growing pushback linked to Elon Musk's public and political persona. His involvement in government roles and polarizing public comments appear to be turning away potential buyers — particularly in left-leaning states. Loyalty from existing customers in those areas has also declined.
In the U.S., more people say they're unwilling to consider a Tesla than in previous years. That shift in sentiment is showing up in both consumer polls and sales data.
Tesla's challenges aren't limited to home turf. In Europe, sales dropped 49% in the first two months of the year, even as overall electric vehicle demand rose. In China, local automaker BYD (BYDDF, Financials) once again pulled ahead, delivering over 416,000 vehicles in the quarter — a 39% jump from last year. BYD's edge lies in affordability and rapid-charging tech, which is gaining traction with buyers.
Tesla shares have fallen 44% since their December peak. A report that Musk may step back from formal government roles offered a brief bump, but Thursday's early losses suggest investor concerns remain.
