Tesla shares rally on reports boss Elon Musk is leaving the US government after Doge backlash

By JESSICA CLARK

Updated: 22:00 BST, 2 April 2025

Tesla has fallen further behind Chinese rival BYD after another sales slump – but its shares rose yesterday on reports boss Elon Musk is leaving the US government.

With the carmaker facing a backlash over Musk’s close ties to Donald Trump and his foray into politics, deliveries dropped to just 336,681 in the first quarter – down 13 per cent year-on-year and its weakest quarter since 2022.

The dismal result left the Texas firm trailing BYD, which has been dubbed the ‘Tesla killer’.

BYD, which stands for ‘Build Your Dreams’, has overtaken Tesla as the world’s biggest producer of electric vehicles. 

It sold 986,098 passenger vehicles in the first three months of 2025, figures this week showed.

That was 58 per cent higher than in the same period of 2024 – a sharp contrast to Tesla. Shares in Tesla fell more than 6 per cent in early trading after the figures were published.

Exposure: Musk has faced a backlash over his political activity and investors worrying he is spreading himself too thin, and his political connections have caused his popularity to wane

But they bounced back to rise by 5 per cent after Politico magazine reported that Musk will step back from his role at the cost-cutting department of government efficiency (Doge) in the coming weeks.

Musk has faced a backlash over his political activity and investors worrying he is spreading himself too thin, and his political connections have caused his popularity to wane, particularly in Europe. 

His relationship with Trump and his appointment at Doge have sparked widespread protests. And the phasing out of the existing version of Tesla’s bestseller, the Model Y, has hurt sales.

The company said that ‘the changeover of Model Y lines across all four of our factories led to the loss of several weeks of production’ in the first quarter.

It added that the ramp up of the new model ‘continues to go well’.

Matt Britzman, an analyst at Hargreaves Lansdown, said: ‘There’s no way to sugar-coat it, first-quarter delivery numbers are a disappointment, though many investors were preparing for a soft number. A drop is no surprise, but the scale is worse than many had expected.’

He added: ‘It’s rare to see sentiment toward a company so closely tied to a polarising White House, and until Musk pulls his focus back to Tesla, shares will remain volatile.’

Tesla did not reveal a geographical deliveries breakdown, but industry data has shown a plunge in sales in Europe as anger over Musk’s links to Trump escalated.

Tesla sales are down 41 per cent this year in France – its second-biggest market in Europe behind the UK.

And they have fallen by 55 per cent in Sweden and Denmark, by nearly 50 per cent in the Netherlands and by 12.5 per cent in Norway.

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Tesla shares rally on reports boss Elon Musk is leaving the US government after Doge backlash

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