Like a dodgy autonomous car, Tesla is veering off course.
What happened: Tesla posted its worst production report in three years, with vehicle deliveries falling by 13% in Q1 of 2025 from the same time last year. Tesla cited the delayed rollout of its updated Model Y as the reason for the drop — but we can think of another one.
Catch-up: This alarming report is another sign that Elon Musk’s role in the Trump administration has been bad for Tesla’s business. As the face of the Department of Government of Efficiency (DOGE), he has put off many EV buyers, who generally skew liberal.
- It has also led to widespread international protests against the brand, ranging from owners selling their Teslas to co-ordinated vandalism against Tesla vehicles.
In Canada: Tesla’s sudden association with Trump is proving to be toxic, with multiple provinces dropping Tesla’s eligibility for its EV rebate programs. Per Shop4Tesla data, Canadian Tesla sales fell by around 70% in January 2025 from just a month earlier.
Yes, but: Counterintuitively, Tesla shares finished yesterday up 5.3%. This surprise surge likely stemmed from reports of Trump telling his inner circle that Musk would soon be retreating from his government involvement and return to focusing on his many businesses.
What’s next: If Musk really does refocus on his business interests (a massive if), investors are hopeful that sales could rebound with the upcoming release of a new, cheaper car and a boost to self-driving features. Still, the question remains whether the carmaker will be permanently tainted for many buyers.—QH