Tesla (TSLA) is facing another setback as US vehicle registrations fell 11% in January, signaling potential weakening demand and growing consumer resistance. According to S&P Global Mobility, Tesla registered 43,411 vehicles last month, down from a year ago. Despite maintaining its position as the top EV brand in the US with a 42.5% market share, Tesla saw a significant 12 percentage point decline year-over-year.
Tesla Faces Tough Competition as US EV Market Grows
While Tesla’s sales declined, the overall US EV market grew by 14% in January, reaching 102,188 registrations. Competitors like Ford (F) and Chevrolet (GM) are gaining traction, with Ford’s EV sales increasing 14% (8,366 units) and Chevrolet surging 36% (5,935 units).
Despite these challenges, Tesla stock closed 7.6% higher on Wednesday, benefiting from a tech sector rally driven by cooling CPI inflation data. However, Tesla shares have still plummeted over 39% year-to-date.
Tesla Sales Decline Globally Amid Political Controversy
Tesla’s US sales slump follows sharp declines in key global markets:
- Europe: Sales plunged 45% in January
- China: Sales dropped 49% in February
Industry analysts speculate that increased competition from new EV brands and backlash against Elon Musk’s political activities are impacting Tesla’s global sales.
Tesla Model Y Takes a Hit, Model 3 Gains Ground
A closer look at Tesla’s lineup shows mixed results:
- Model Y: The best-selling EV in the US saw registrations fall 26% (23,898 units), likely due to a production shift as the updated model enters the market.
- Model 3: Registrations jumped 19% (14,004 units), thanks to last year’s refresh.
- Model X & Model S: Sales dropped 45% and 38%, respectively.
- Cybertruck: Despite price cuts and lease deals, it recorded 2,807 registrations, slightly below its monthly average.
Wall Street Remains Divided on Tesla’s Future
Tesla’s recent stock rebound comes after one of its worst trading days in five years. On Tuesday, President Donald Trump announced plans to purchase a Tesla Model S, hoping to boost sales.
Meanwhile, analysts remain split:
- Bearish outlook: Evercore and UBS both cut their 2025 Tesla delivery forecasts to 1.7 million–1.75 million units, citing concerns over brand deterioration and volume losses.
- Bullish outlook: Morgan Stanley’s Adam Jonas remains optimistic, pointing to Tesla’s AI and autonomous vehicle potential as key drivers of future growth.
Elon Musk’s Political Moves Stir Controversy
Tesla’s brand struggles may also stem from Elon Musk’s political actions. As head of the White House’s controversial Department of Government Efficiency (DOGE) initiative, Musk has faced growing protests at Tesla showrooms. His reported support for far-right parties in Germany and the UK has further damaged Tesla’s reputation in Europe.
Tesla’s Future: AI, Robotaxis, and Market Recovery?
Looking ahead, analysts see potential catalysts that could drive Tesla’s recovery:
- Robotaxi testing in Austin, Texas
- Looser federal regulations for autonomous vehicles
- Advancements in Tesla’s Optimus humanoid robot
Despite short-term challenges, analysts like CFRA’s Garrett Nelson believe Tesla’s strong financial position ($36B+ in cash) and industry-leading margins will help it navigate consumer backlash and market shifts.
Will Tesla rebound or face more turbulence in 2025? Stay tuned for updates on Tesla’s evolving market position.
