In recent months, Elon Musk has been the name in everyone’s mouth. The world’s richest man has dominated political discourse across the globe, specifically the West. This includes his close support for Trump’s return to the White House, his proclamation of support for the AFD in Germany, and his notably controversial thoughts on the UK government. 

Musk has been very vocal in his beliefs, and as the owner of X (formerly Twitter), he no longer has had to concern himself with the potential regulation of his opinions. Instead, he has leveraged X to safely promote his views and drive engagement to news topics that align more closely with his right-leaning political beliefs. 

Given Musk’s increased influence and political importance, criticism regarding Musk’s views has grown to become widespread. For instance, the UK government expressed concerns by stating that the Home Office Homeland Security group had begun investigating comments he made online on X. More recently, Musk came under fire for antisemitism after attending an AfD rally in Germany, which coincided with an apparent Nazi salute at President Donald Trump’s inauguration in Washington. Although Musk has repeatedly denied any antisemitic intent, the ambiguity surrounding his hand gesture once again threw him into global controversy.

Although Tesla’s market cap surged in Q4 2024 from $683 billion on October 23 to over $1.5 trillion by December 17, driven by investor optimism over Musk’s ties to Trump and the prospect of pro-business, “America First” policies, it has since pulled back to $1.1 trillion as of February 2025. 

Data from TradingView 17/02/2025

This follows from indications of a decline in global sales and an increased threat from Chinese EV competitor BYD. In Germany for instance, Tesla sold just 1,277 vehicles in January 2025, which marked a 59.5% decline from January 2024. This reduced Tesla’s market share in germany down from 10% to 4%. In France, sales plummeted by 63%, with only 1,143 new vehicles registered. In the UK, Tesla saw a 12% drop even though EV sales in the country grew by 35%. Similarly, sales fell by 44% in Sweden, 38% in Norway, and 42% in the Netherlands.

As the electrical vehicle market continues to grow with a 25% sales increase in 2024, Tesla’s sales decline in European sales is indicative of a potential decline in global market share. This is not a positive outlook for Tesla, at a time when sales should be increasing as they look to hold on to their leading market share, which sat around 20% of global sales in 2024.

The leading competitive force is the BYD group. Coinciding with Musk’s deep interests in British politics BYD sales overtook Tesla in Britain for the first time in January 2025. In comparison to January last year, when Tesla outsold BYD in the British market by over six times. BYD poses a challenge for Tesla’s presence in Asia, specifically China since Tesla sales in China dropped 11.5% in January 2025, as BYD achieved a near 50% increase. 

To combat the decline in sales the business has responded with price increases. In Germany the Tesla Model S price has been increased by 18% to €109,990, while in the US the Model X has also increased in price by 6.2% to $84,990. The most notable feature of this rise in the US is that the price now exempts new purchases from the US Government’s tax credit for clean vehicles. This exemption allows purchasers up to a $7,500 tax break when purchasing an electric vehicle, but the vehicle price must be under $80,000 disqualifying the Tesla X model. 

Despite Musk’s close alignment with President Trump’s values, his protectionist agenda may hurt Tesla even more. Tesla has a strong global supply chain with 50% of its parts made abroad, mostly located in Mexico, Canada and China – those hit the worst with proposed tariffs. This may increase supply costs for the business when complying with tariffs. In reaction to the US tariffs, counter-tariffs implemented by China and proposed by Canada could see a reduction in exports and global sales for the business. 

Nevertheless, the negative outlook could turn positive, as the protectionist push in trade could allow the US market to be more easily dominated by Tesla. Yet on the whole it is unclear, as for this year sales continue to indicate a shift for the worse for Tesla.