Is Tesla Stock Headed for More Trouble?
Tesla stock could be hurt badly very soon due to a few key factors that may make the company look badly.
Quick overview
- Tesla stock saw a slight increase in early morning trading but may face challenges ahead.
- Vehicle registrations for Tesla in California dropped by 21.1%, contributing to a negative sales trend globally.
- Sales have been declining for five consecutive months in Europe, with a 27% decrease compared to last year.
- Elon Musk's return to politics with the America Party could negatively impact Tesla's sales and profitability.
Tesla (TSLA) stock climbed slightly in early morning trading for Wednesday, and it has been relatively high for the past week of trading, but that could soon change.
Sales for Tesla vehicles in California are down in the latest report, which showed a drop of 21.1% in vehicle registrations for the electric automaker. This covers the most recent quarter, and the negative report is just one more in a long list of similar reports from regions around the world.
In a few areas, Tesla sales have increased in 2025, but in most major markets, Tesla sales are dropping. Adding that latest report from California to the others creates a damning image of Tesla’s sales performance. For five consecutive months, Tesla sales have been dropping in Europe. Compared to May of last year, in a recent report, the sales for Tesla vehicles were down 27% in the region.
Musk Returns to Politics
Even though Elon Musk has left the United States government and has resumed his work as Tesla’s CEO, he is preparing to reenter politics. He announced earlier this month that he would be starting up the America Party which would serve as a rival to both Democrats and Republicans.
The shift back into politics could hurt Tesla, as it is widely believed that Musk’s political affiliations have hurt company sales over the last year. This further move toward politics may further hurt the company’s ability to improve their stock and stay afloat.
Tesla may struggle with profitability the next quarter, especially with rising tariff rates and a lack of protection from the Trump administration. Now that Musk and Trump are no longer partners, they are butting heads, and Musk could end up on the losing end of that fight. The biggest potential loss for Musk would be in the area of very profitable government contracts. If his company loses those, they could struggle to stay profitable this quarter.
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