The Reuters article reports that despite CEO Elon Musk’s promise of a turnaround after Tesla’s first-ever sales decline in 2024, investors are now expecting further drops in vehicle deliveries for 2025. The key points include:

• Sales Decline: Tesla’s quarterly deliveries fell by 13%, marking the weakest performance in nearly three years, and analysts predict a further decline of around 9% in 2025 compared to last year’s 1.79 million deliveries.
• Brand Damage and Political Backlash: The decline is largely attributed to growing backlash against Musk’s political involvement, particularly his support for far-right politics in Europe and his advisory role with the Trump administration. This controversy has not only hurt Tesla’s public image but has also sparked protests and vandalism at Tesla locations.
• Competitive Pressures and Product Lineup: In addition to political issues, Tesla is facing stiff competition from rivals like China’s BYD and European automakers. Concerns are also growing over Tesla’s aging product lineup, despite recent updates to the Model Y, and uncertainty over the launch and appeal of an anticipated cheaper car.
• Cost Pressures: The article notes that tariffs on battery components and imported materials are likely to increase production costs, putting further pressure on Tesla’s margins.

Overall, the article paints a picture of a company grappling with both external competitive challenges and internal brand issues, which could combine to create a tougher sales environment in the coming year.