While anticipating Tesla’s entry into India, the biggest global EV maker has also encountered obstacles in other regions because of sinking sales, regulation problems, and backlash against CEO Musk’s political activity. Tesla has finalized, an area of 4,000 sq. ft., a showroom in BKC, Mumbai, at Rs 23.38 crore over five years for commercial sales in India’s premium EV market.
But at the global level, concerns are rising for the firm. Shares of the carmaker have tumbled 25% in the last month, shedding 28% in the last year overall, with the company’s market cap now barely above the $1 trillion mark. There are considerable doubts about how focused Musk will be due to his new demands on his attention as he manages not only Tesla but also SpaceX and other ventures and gives advisory support to U.S. President Donald Trump.
How it started?
Tesla’s troubles began early last year, with supply chain disruptions leading to disappointing sales. In Q1 2024, the company delivered under 387,000 vehicles, its lowest in over a year. Production setbacks have included Houthi attacks in the Red Sea, which briefly shut down Tesla’s German factory, and an alleged arson attack that further disrupted operations.
China has been another battleground for Tesla, with its ‘Navigate on City Streets’ feature receiving criticism for underperformance. The company plans a software update to enhance Autopilot functionality, but regulatory hurdles remain, especially as U.S. policies shift toward reducing dependence on China. Meanwhile, trade tensions have escalated, with Canada considering a 100% tariff on Tesla vehicles after the U.S. imposed tariffs on imports.
Stiff competition from rivals
Tesla also faces stiff competition from EV leaders like BYD, Volkswagen, and Rivian, while critics argue its product lineup has stagnated. With Musk investing heavily in Trump’s re-election and gaining influence in federal operations, concerns over conflicts of interest loom large. As Tesla enters India, its global turbulence raises questions about its long-term trajectory.
