Tesla’s sales are off to a rough start in 2025, with significant declines in key global markets. Despite launching the Cybertruck, the company has struggled to maintain demand. Sales data from various regions, including California, Europe, and China, show a downward trend, even in areas where Tesla once dominated the electric vehicle (EV) market.

Tesla’s decline in California 

California, the largest EV market in the U.S., saw Tesla’s sales drop by 11.6% year-over-year in 2024. While the state’s overall EV market share remained steady at 25.3%, Tesla was a major reason for the market’s decline. Other brands saw a 1.4% increase in sales, while Tesla’s numbers fell.

The Model 3 was hit hardest, with registrations declining by nearly 30,000 units from 2023. The Model Y also saw a drop of over 4,000 units. The Cybertruck became California’s top-selling electric pickup but recorded only 9,019 registrations, a figure lower than expected.

European Market 

Tesla is losing ground in Europe as well. In Germany, sales dropped 60% in January 2025, with only 1,277 vehicles registered. Tesla also lost its long-held position as the top EV brand, as Volkswagen, BMW, Audi, and Chinese brands gained market share. In France, Tesla’s sales plummeted by 63% year-over-year in January. Despite an increase in EV adoption, the UK market also saw Tesla’s sales decline by 8%.

China sales fall as market shifts 

China, which accounts for one-third of Tesla’s global sales, saw an 11.5% drop in sales in January 2025. The decline is partly attributed to the seasonal slowdown caused by the Chinese Spring Festival and production adjustments at Tesla’s Shanghai Gigafactory. However, growing competition from local Chinese EV brands is also a factor in Tesla’s struggles.

Reasons behind Tesla’s decline 

Several factors are contributing to Tesla’s falling sales. Increased competition from traditional automakers and Chinese EV manufacturers is eroding Tesla’s dominance. The company also lacks a presence in key segments like three-row SUVs, a growing category in the EV market.

In Europe, the end of EV subsidies in some countries has led to a slowdown in demand. There are growing calls for an EU-wide subsidy program to counter rising Chinese EV imports.

Political controversies impact sales

 Elon Musk’s political involvement is also seen as a factor affecting Tesla’s reputation. Accusations of hacking into the U.S. A report from the Nonpartisan EV Politics Project indicates that Tesla is losing Democratic-leaning buyers who traditionally support EV adoption faster than it is gaining conservative buyers.

Stock market and future outlook 

Tesla’s stock initially surged following the U.S. election due to investor optimism over Musk’s ties to Donald Trump. However, as sales reports revealed a decline, stock prices have since declined.

The company’s next major test is the launch of the refreshed Model Y. While a successful release could help recover sales, there are concerns that Musk’s personal controversies may overshadow Tesla’s product offerings. If consumer perception continues to shift, even a strong Model Y update may not be enough to reverse Tesla’s fortunes.

Tesla’s rough start to 2025 highlights the challenges the company faces in a rapidly evolving EV market. With increased competition, changing market conditions, and Musk’s political controversies, Tesla’s future remains uncertain.

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More than 300,000 Tesla EVs are subject to crash risk, says the latest National Highway Traffic Safety Administration (NHTSA). According to the report, there is a problem with the Full Self-driving (FSD) beta software rolled out in Model S, Model X, Model 3, and Model Y.

US authorities have now decided to recall 362758 Tesla EVs. However, the vehicles won’t be actually recalled to a service center instead, the company will roll out a software update that would fix the problem. Authorities said that the over-the-air (OTA) update will happen by April 15. Tesla said that the OTA updates will improve how FSD Beta negotiates certain driving maneuvers and will help to solve the issue.

NHTSA opened an in-depth investigation on Tesla’s Autopilot system in August 2021. The regulatory authority said that it was a kind of investigation that required a lot of resources, and technical and legal expertise and covered more than 830000 vehicles. The regulatory authority also showed its concern for a December Tweet where CEO Elon Musk agreed to a suggestion of removing the ‘steering wheel nag,” an alert that instructs drivers to hold the wheel to confirm they are paying attention. 

For years US authorities have been imploring Tesla to make better safety features for its EVs. Musk himself had admitted that crashes due to the autopilot system, stem more due to the company’s attitude towards the problem rather than technical difficulties. 

What is the problem with Tesla FSD?

Recently, in a stock Exchange filing, Tesla informed that there were some glitches in its self-driving system. It said that the FSD may allow the vehicle to act unsafe around intersections and may make mistakes while proceeding through steady yellow traffic lights. The EVs also showed some issues when they had to travel straight through an intersection from a turn lane. 

Between May 2019 to September 2022, Tesla received more than 18 warranties some of which may be related to the conditions mentioned above. However, the company said that it was not aware of any incidents or deaths due to this particular self-driving software issue. 

Tesla has not yet made an official statement regarding the recall. However, CEO Elon Musk, shared a tweet showing his contempt for the word recall. 

What is Tesla Autopilot System?

Tesla Autopilot is a bunch of advanced driver-assistance features, offered by the company to its vehicles. The Autopilot system conforms to the Level 2 SAE International Vehicle Automation standards and offers functions like lane centering, self-parking, traffic-aware cruise control, auto lane change, semi-autonomous limited navigation and automatically getting the car from the garage or parking spot. 

All Tesla Vehicles come with these standard driver-assist features. However, the company offers its advanced fully autonomous FSD system for an additional price of $15000. With the FSD in place, owners can get extra features like automatic speeding and slowing down, and making turns which is not available in the standard autopilot system. Currently, Tesla FSD remains a Level 2 advanced-driver assistance system which requires the driver to remain fully engaged while the vehicle is in motion. 

The company is now rolling out FSD Hardware 4.0 which will make Tesla cars the most technologically advanced vehicles in the world. Though the company has not shared many details about FSD 4.0, experts are saying that the upgrades may include a generation 4 complex vehicle control system (Autopilot), a new computer that is going to be 4 times more powerful than the one available in FSD 3 and a new GNSS antenna for navigation. The upgrades may also include changes to the Automatic Dipped and Main Beam Sensor, unification of Model X brake system application, new stay arm for Model X interior rear-view mirror, update to the manufacturer’s engine code, update to the vehicle’s rear badging, an increased speed limit. 

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India has seen rapid growth in its electric vehicle numbers due to several intervening reasons. Both the central and regional governments have implemented incentive programs that have propelled the country forward in the EV revolution. However, the Indian government has made another tumultuous decision to reduce the GST of battery packs from 18% to a flat 5%. This means that 13 percentage points have been slashed from the GST for cars whether they are fitted with a battery or not.

The move by the Indian government to give this huge concession on GST is meant to further stimulate the production and demand of EVs in the subcontinent. The statement from India’s Finance Ministry noted that the decision on the GST rate cut was taken by the GST Council last month. EV manufacturers and by extension, Indian consumers are direct beneficiaries of the slash in EV batteries taxes. The battery pack of an electric vehicle accounts for up to 50% of its cost.

This is the second time the Indian government is slashing the GST rate in four years. In 2018, it was slashed from 28% to 18%. This provided additional incentives for EV manufacturers to set up shops in India. The Indian subcontinent has seen a surge in manufacturing and sales of EVs in the last two years. This move will further stimulate the market for the delivery of renewable energy vehicles and lower carbon footprint. The trickle-down benefits of this move could enhance capacity and demand across the EV ecosystem in India.

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Honda is entering the EV scooter segment with its all-new Honda Activa E. In an interview with ET Auto, Honda Motorcycle and Scooter India President, Atsushi Ogata, confirmed an HMSI EV product debut in the country. But the lunch is not expected in India until 2023.

The electric scooter is said to come with battery swapping technology, which will be a convenient option for buyers to replace a discharged battery with a charged battery at swap stations and to charge the battery at home. Consumers will have two options: they will be able to swap their dead batteries with charged ones through either a subscription model or a nominal fee or the user can also buy back up a battery pack that can be charged and replaced when the installed one gets discharged.

Earlier this year, Bounce also launched the Bounce Infinity E1 electric scooter which became India’s first swappable battery electric scooter. The company has also introduced a similar subscription-based battery swapping system dubbed ‘battery as a service.’

In that accord, the upcoming Honda Activa E will be a direct competitor to the Bounce Infinity E1 along with other major electric scooters in India like the Ola S1, Bajaj Chetak, Ather 450X, and Hero Electric scooters.

This may also prove to be the right time to enter the EV market for Honda as battery prices are coming down and central and state governments announced incentives to encourage a faster transition to e-mobility, industry stakeholders also said that the potential of conversion is high as this time as 21 million two-wheelers were sold before the outbreak of the pandemic in FY19.

Honda’s previous partner Hero is also set to release its new EV scooter next month, introducing more competition in the developing Indian EV market.

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A Guangzhou Auto Show walk-around video has provided a rare glimpse of the design of its next electric SUV in China with Tesla’s Cybertruck vibes visible around the models. Honda had announced back in October that it plans to launch five new electric vehicles in China, with the first two models scheduled for a 2022 release. The new battery-powered models will come under Honda’s new partnership with Dongfeng and GAC and will sport the e:N brand name.

The first two e:N EVs are essentially the same version with HR-V subcompact crossover models. Honda however showcased the five EVs on the lineup under the e:N series in the walk-around video during the Guangzhou Auto Show. While the first two models are close to their eventual official unveiling, Honda provided stunning concept details of the three models in development. These models preview the next generation of EVs based on the e:N Architecture, a platform exclusively designed for the e:N series.

The concept designs show that the models are named e:N Coupe, e:N SUV, and e:N GT, and production is envisioned for at least one of the models by 2024. The EVs will be produced at new production plants at both Dongfeng Honda and GAC Honda. They reflect some very wide designs away from anything we have seen from Honda yet, with some comparisons with Tesla’s Cybertruck in design. A total of 10 variants of these models will be released to the Chinese market, while export overseas is also a strong possibility.

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The Indian government is considering slashing the import duty on electric cars to as low as 40 percent, reports Reuters citing two government officials. The development comes just days after Tesla appealed this to the Indian government.

The report adds that for electric vehicles (EVs) with a valuation of less than $40,000, the tax rate can be slashed to 40 percent compared to 60 percent currently. For EVs valued at over $40,000, the rate could be slashed from 100 percent to 60 percent.

India’s finance and commerce ministries, as well as Niti Aayog, are discussing the proposal and all stakeholders will be consulted.

According to industry estimates, India is currently the fifth largest car market with an annual sale of about 3 million vehicles. However, the majority of cars sold in the country are priced under $20,000.

Last month, Tesla had pitched the Indian government to reduce the import duty on electric vehicles by arguing that lowering duties would make EVs more affordable and boost sales.  However, the appeal from Tesla received mixed reactions from industry leaders in India and pushed the ‘Make In India’ initiative, India’s drive to boost local manufacturing.

But one of the officials said that the government is in favor of cutting import duties to see companies like Tesla providing benefits to the domestic economy by manufacturing locally later on, or give a firm timeline on when it would be able to.

A government official told Reuters: “Reducing import duties is not a problem as not many EVs are imported in the country. But we need some economic gain out of that. We also have to balance the concerns of the domestic players.”

Since the duty cut is being considered only for EVs and not other categories of imported cars, it should not be a concern for domestic automakers as they mainly manufacture affordable gasoline-powered cars.

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Huawei has struggled to cope with the stringent restrictions placed by the US government that has made it impossible for the Chinese company to get supplies from its US suppliers for critical components of its production process and 5G rollout. This has led the firm to sell off its Honor smartphone brand, and it continues to pursue investments in other areas like pig farming, mining, home electronics production, and much more.

Sources now say that the company may have plans to foray into the EV market by pursuing investment in that direction. The world’s largest tech equipment maker is believed to be in talks with China-based Changan Automobile and a few others on producing EVs in their plants, while also in talks with another company to manufacture the EVs on its behalf.
However, there is no official confirmation yet for this new investment model for the company. On the contrary, it has specifically stated that it had no plans to produce Huawei branded EVs, neither is it in talks with automakers in that regard.

With the rising demand for firm action in fighting the global challenge of climate change, the demand for electric vehicles and other green choices in mitigating the effects of Greenhouse gas emissions has been on an increase in recent years. A few countries across the world have set firm targets in phasing combustion-driven vehicles, some as early as within a decade. This policy has therefore encouraged EV makers to expand their capacity to meet the growing demand while new entrants are also coming into the space to have a piece of the pie. This may be Huawei’s vision, a pie of the EV pie.

While the US sanctions have had a very negative effect on the company, Huawei continues to develop in other areas and is slated to release a couple of high-end 5G smartphones this year, with its in-house operating system – HarmonyOS.

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