Despite the sales downturn, some investors remain hopeful that favorable regulations may arise due to CEO Elon Musk's political connections.

Tesla's current situation represents a critical moment for the company, as it must navigate significant hurdles to reclaim its market position in the increasingly competitive electric vehicle landscape.

Elon Musk has emphasized a future focus on autonomy, with substantial investments in infrastructure, including a 400% increase in AI spending in 2024 and plans to launch a Robotaxi business in 2025.

Looking ahead, investors are optimistic about Tesla's plans to launch a new affordable vehicle model in the first half of 2025, which could help recover sales.

Currently, Tesla's stock holds a 'Hold' consensus rating, with mixed recommendations from analysts amid a competitive EV market and slowing demand.

Concerns have been raised regarding whether Musk's political engagements are impacting Tesla's brand appeal, leading to some owners expressing disapproval.

The refreshed Model Y SUV launched in January has led to a planned suspension of production lines in Shanghai to prepare for increased output.

In January 2025, Tesla's sales of China-made electric vehicles fell to 63,238 units, marking an 11.5% decline from the 71,447 units sold in January 2024.

While Tesla faces challenges, its domestic competitor BYD reported a remarkable 47% increase in sales during the same period, raising concerns about Tesla's competitive edge.

Tesla has not introduced new models recently, apart from the much-anticipated Cybertruck, and the updated Model Y is still not widely available.

Analysts caution that unresolved supply chain issues and tariff uncertainties could pose further difficulties for Tesla in the future.

In a strategic move, Tesla has reinstated free Supercharging as an end-of-year incentive, extending it to Model S and Model X orders.