Tesla, once the darling of the electric vehicle (EV) world, is facing some serious headwinds. Sales dropped by 13% in the first three months of the year. This isn't just a small blip. It's a clear sign that the company is struggling to keep buyers interested.

One big issue is the aging lineup of cars. Some people might be holding off on buying the popular Model Y, waiting for an updated version to hit the market. Meanwhile, competitors are stepping up their game. Other EV makers, including China's BYD, are offering improved models that are giving Tesla a run for its money.

The company delivered 336, 681 vehicles globally in the first quarter. That's down from 387, 000 in the same period last year. Even with deep discounts, zero financing, and other incentives, sales are down. This could be a red flag for investors when Tesla reports its first-quarter earnings later this month.

Elon Musk, the company's CEO, has been a lightning rod for controversy. His embrace of right-wing politics and role in the Trump administration has sparked a backlash. Protests have erupted at Tesla showrooms in the U. S. and Europe, where sales declines have been even steeper. Some consumers are even putting bumper stickers on their cars saying, "I bought this before Elon went crazy. "

Musk has been busy with other projects, including a role in the Department of Government Efficiency. This has led to complaints from Tesla investors, who feel his focus has been diverted from running the company. New York City's comptroller, who oversees pension funds holding Tesla stock, even called for a lawsuit accusing Musk of "driving Tesla off a financial cliff. "

Tesla's stock has taken a hit, plunging by roughly half since hitting a record in mid-December. Analysts are still trying to figure out exactly how much the fall in sales is due to the protests or other factors. But even the most optimistic analysts are acknowledging that Musk's political stances are hurting the company. Musk himself recently admitted that his role in the Department of Government Efficiency has been costly, both in terms of his personal wealth and Tesla's stock price.

Meanwhile, Tesla cars have been the target of vandalism, with some being smashed and set on fire. Protests have been staged at hundreds of Tesla dealerships. In Europe, Germans have been particularly upset after Musk publicly supported a far-right party in national elections and gave what many say was a Nazi-like salute at a Trump inauguration rally.

Despite all this, Tesla is expected to report earnings of 48 cents per share for the first quarter, up 7% from a year earlier. Nearly all of Tesla's sales in the quarter came from the smaller and less-expensive Models 3 and Y, with the company selling less than 13, 000 of the more expensive models, which include the X, S, and Cybertruck.

ELECTRIC VEHICLE COMPETITION

Tesla's Slump: Is the Electric Car Giant Losing Its Spark?

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