Tesla stock has plunged to its lowest level in three years in a surprise drop after backlash against CEO Elon Musk and his leadership of President Trump’s Department of Government Efficiency (DOGE).
According to BBC, the electric car maker reported 336,000 vehicle deliveries in the January to March quarter, a 13% drop from a year ago.
The number marks its worst showing since 2022.
Shares of Tesla have also tumbled since the release of the unexpectedly low sales numbers.
And while the company’s steep competition from Chinese firm BYD has been a key factor, experts believe that Musk’s controversial role in the Trump administration has had the biggest effect.
“The more political he gets with DOGE the more the brand suffers, there is no debate. This quarter was an example of the damage Musk is causing Tesla,” Wedbush Securities analysts wrote in an investor note on Wednesday.
They also called the quarterly report a “disaster on every metric” and a “fork in the road moment” for Musk.
Musk admitted last month that he is having “great difficulty” running his various companies while also handling the work of DOGE.
The decline in sales could stem from multiple factors, including backlash against the Tesla CEO, but it could also be triggered by shifts in Tesla’s brand strategy over the past few years.
While Tesla has long been a dominant force in the EV market, its focus appears to be shifting toward artificial intelligence (AI) and robotics.
Aside from the Cybertruck, the company has not introduced a new EV model in the U.S. since 2020, when it launched the Model Y crossover SUV.
Industry experts remain divided on whether this shift will ultimately benefit or hurt Tesla’s performance.
“The bet on Tesla’s shares soaring due to Musk’s political involvement has not worked out thus far,” Adam Sarhan, founder of 50 Park Investments, told Bloomberg News.
“Investors who initially anticipated massive benefits from Musk’s political involvement got too excited, and now cooler heads are prevailing.”
The report comes just hours ahead of Trump’s anticipated announcement of a 25 percent tariff on foreign vehicles and automobile parts.
According to The Hill, Tesla produces all of its North American vehicles in the U.S. with production facilities in California and Texas, potentially lessening the impact for the Musk-led company, experts told The Hill earlier this week.
Still, the electric vehicle manufacturer may not be entirely immune, as some of its parts are sourced internationally.
