Tesla Under Pressure: Stock Drops 6% Amid Brand Erosion and Political Controversy Surrounding Musk

Tesla shares fell by 6%, closing at $227.50 just one day before the company is set to announce its Q1 2025 earnings, amid growing concerns over brand erosion and the impact of trade and political tensions on performance.

Stock Performance and Delivery Decline
Since the start of 2025, Tesla’s stock has lost around 44% of its value, weighed down by a 13% drop in vehicle deliveries during Q1. The company delivered 336,681 vehicles, falling short of expectations that ranged between 360,000 and 370,000 units

Political Shift and Brand Impact
Analysts have warned that Tesla has become a “global political symbol of the Trump administration,” cautioning that this shift could lead to a “permanent destruction of demand” by 15% to 20% due to brand damage linked to Elon Musk’s involvement in government-related politics

Tariffs and Trade Tensions
The Trump administration’s 25% tariff on imported vehicles has negatively impacted Tesla’s plans to launch lower-cost models, pushing the rollout of those vehicles to 2026

Earnings Outlook and Challenges Ahead
Analysts forecast Tesla will report $21.24 billion in revenue for Q1, with earnings per share estimated at $0.40 — a decline compared to the same period last year

Market and Investor Reactions
These developments have weakened investor confidence. Firms like Barclays and JPMorgan have downgraded their outlook on Tesla, citing “unprecedented brand damage” and falling demand, particularly in key international markets such as China

As political and trade headwinds persist, Tesla faces a critical test in its ability to restore investor trust and stabilize its financial performance, while growing pressure mounts on Elon Musk to steer the company away from political entanglements and back toward its core business