Five reasons for Tesla's crisis beyond Elon Musk

BarcelonaElon Musk is an atypical and somewhat impatient entrepreneur, and those close to him claim that he quickly loses interest in his existing projects and initiatives to take on new ones, in a relentless race that opens up new horizons, projects and business, personal and political challenges. In fact, Tesla seemed to be the apple of the South African entrepreneur's eye between 2017 and 2020, until his business priorities became the space company Space X and the social network Twitter, which he renamed X. It's no secret that over the past few months – largely explains the 43% drop in Tesla's stock market value during the last two months of trading. But there are more reasons behind this crisis.

Below, we'll explain five key factors that have contributed to the company's decline, which appears to have entered a free-fall spiral in 2025.

A short and aging range of cars

Tesla has a very small product portfolio, with only four cars on sale that have been on the market for a few years: the Model 3, Model Y, Model S and Model X. The bulk of the brand's sales are concentrated in the Model 3 and Model Y, which account for almost 90% of the total.

Model 2, a project of economical and affordable city car With a base price of around $25,000, it should complete Tesla's lineup and become a mass-market product, but it has already missed all implementation schedules and may never enter production. This reality will cause Tesla to lose its leadership in the electric car segment this year to emerging Chinese manufacturers like BYD, which have been able to take advantage of Tesla's significant sales decline, which the latest reports place at around 70% worldwide.

Quality and safety issues

Tesla's biggest Achilles heel in recent years has been safety. Several organizations, such as the US-based IIHS (Insurance Institute for Highway Safety) and the German TÜV (Technischer Überwachungsverein), have published reports highlighting deficiencies and shortcomings in the safety and reliability of Tesla cars, particularly related to the Autopilot autonomous driving system.

Talent depletion and loss of brand image

Over the past year, Tesla has lost two of its best designers, David Imai and Bernard Lee, who had been with the company since 2011 and are the creators of successful products such as the Model 3 and Model S. They are responsible for generating a modern, stylish, and minimalist brand image that has helped it win over large companies.

Added to this loss of talent is the decline in the brand's image due to Elon Musk's political stances, which has had a decisive impact on the decline in new car sales. Tesla has gone from being considered an innovative, disruptive, and eco-friendly brand that aroused sympathy and found potential customers concerned about the environment, sustainability, and social justice, to being associated with Donald Trump and the most conservative political tendencies both in the United States and abroad.

The Cybertruck disaster

By now, it's abundantly clear that Tesla can't sell its dystopian pickup truck. Over the past few years, it's only been able to register around 10,000 units worldwide, a far cry from Elon Musk's optimistic forecasts. The Cybertruck is an objectively strange vehicle that finds itself in a segment—the pickup truck segment—where the buyer profile (especially in the United States) isn't particularly inclined toward disruptive, futuristic models. The magnitude of the tragedy is such that Tesla has had to halt production of this pickup truck to avoid saturating the market with a product it can't sell even with generous commercial discounts.

Tariff war

The trade war looming over the global automotive industry is another obstacle for Tesla. Tariffs are driving up the price of the raw materials Tesla needs to manufacture its products, increasing costs and impacting the final price of the product. It remains to be seen what effects the trade war initiated by the Trump administration may have on Tesla's gigafactories in China and Germany. It also appears to definitively bury the possibility of opening a new factory in Mexico, one of the brand's flagship projects for 2025.