Tesla sales trends: A potential concern for Elon Musk

Wall Street banks are expressing concern that Donald Trump’s efforts to dismantle the Biden administration’s climate policies supporting electric vehicles could lead to significantly slower growth in Tesla’s vehicle sales this year than anticipated by its co-founder, Elon Musk.

Analysts predict that Tesla is set to sell 2.07 million vehicles this year, marking a 16% increase compared to 2024. While this represents a recovery from last year’s decline—the first reported drop since 2011—it falls well short of Musk’s forecast of 20% to 30% growth in October and the nearly 40% annual growth rate seen in the previous two years. This disappointing outlook raises serious concerns about Tesla’s future.

The figures highlight the challenges Tesla faces as Trump vows to reverse policies that have boosted electric vehicle sales in the U.S. A recent White House memorandum indicated that the administration would evaluate the elimination of “unfair subsidies and other malicious government-imposed market distortions,” further adding to the uncertainty surrounding Tesla’s prospects.

Morgan Stanley analyst Adam Jonas remarked, “Trump 2.0’s opposition to electric vehicle incentives has hit 2025 volume expectations hard,” emphasizing the potential difficulties ahead for Tesla.

Barclays analyst Dan Levy estimates that approximately two-thirds of Tesla’s U.S. sales benefit from tax credits, underscoring the fragility of the company’s sales strategy.

As Tesla prepares to announce its fourth-quarter earnings on Wednesday, the potential removal of the $7,500 tax credit for electric vehicle buyers by Trump could pose significant challenges. This uncertainty paints a bleak picture for Musk and the future of Tesla in an increasingly competitive market.