Why Tesla Is Under Fire: An In-Depth Look at the Company Under Siege

Tesla, under the leadership of CEO Elon Musk, has revolutionised the electric vehicle (EV) industry, becoming synonymous with automotive innovation. However, the company currently faces significant challenges, including financial setbacks, criticism of business practices, regulatory pressures, and concerns over public perception.​

Recent Financial Setbacks

In March 2025, Tesla's stock experienced a sharp decline, plummeting by 15% in a single day and erasing approximately $127 billion from its market valuation. This downturn has contributed to a total loss of over 40% in the company's stock value since the beginning of the year. The decline is partly attributed to a slump in deliveries in China, a crucial market for Tesla, which has heightened investor concerns about the company's growth prospects. ​

Financial reports from 2024 further underscore these challenges. Tesla's earnings for that year were disappointing, with a significant portion of its profits - approximately 40% - stemming from the sale of regulatory credits rather than core automotive operations. This reliance raises questions about the sustainability of Tesla's profitability in an increasingly competitive EV market.​

Criticism of Business Practices

Tesla has faced allegations regarding its business practices, particularly concerning workplace conditions. Reports have highlighted concerns about long shifts and the pressure to meet high production quotas within Tesla's factories. Elon Musk's management style, which often emphasises speed over process, has also come under scrutiny. These factors have contributed to growing discontent among workers and activists, leading to public relations challenges for the company.​

Regulatory Challenges and Market Dynamics

Externally, Tesla confronts significant pressures from regulatory bodies. The EV market is becoming increasingly competitive, with established automakers and startups launching their own electric models, often with substantial backing. This surge in competition has prompted closer scrutiny of Tesla's business practices by regulatory agencies, leading to investigations and potential fines. Additionally, heightened government scrutiny regarding environmental impacts - especially related to battery production - adds another layer of complexity. As regulations evolve, Tesla must adapt to maintain its leadership position in the market.​

Public Perception and Elon Musk's Influence

Elon Musk's active presence on social media has significantly influenced public perception of Tesla. While his engagement has bolstered the company's image in many areas, his unpredictable behaviour has also attracted criticism. Musk's controversial statements and actions, both online and offline, have led to polarised opinions about him and, by extension, Tesla. His involvement in political matters, including associations with figures like former President Donald Trump, has further complicated public perception. These dynamics shape how consumers and investors view the company, adding to the challenges it faces in a rapidly evolving market landscape.​

Tesla's recent financial losses, coupled with critiques of its business practices, increasing regulatory scrutiny, and Elon Musk's polarising influence, have placed the company at a critical juncture. Addressing these issues is crucial not only for its public image but also for its sustainability in the competitive electric vehicle market. The question is does he have it in him to address these issues.

Meanwhile, keep an eye on our analysis of contradiction - as Trump cancels out electric cars for petrol cars and appears to show public support for Tesla.

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