3 Things Tesla Needs to Do to Make a Comeback | Invesloan.com

Tesla just can’t seem to catch a break.

The company’s stock has fallen amid a backlash against CEO Elon Musk, and its latest delivery report on Wednesday showed its car sales business is fundamentally in trouble.

The company’s Q1 deliveries dropped 13% from the previous year to just 336,700, well short of analysts’ forecasts. Dan Ives, who is typically bullish on the automaker, called the figures “a disaster” that showed the automaker is in a “full-blown crisis.”

Business Insider spoke to some of the auto industry’s keenest observers about what the company needs to do to turn things around.

Launch more models

While the political backlash against Musk has grabbed headlines, lead editor for Kelley Blue Book Sean Tucker told BI that Tesla’s aging product lineup was a big reason deliveries were falling.

He said the carmaker has been grappling with a downward trend in delivery numbers since February 2023.

“They grew from 2020 to 2023, and then they started shrinking,” Tucker said, citing data from Kelley Blue Book that found Tesla hit a peak of 60,325 monthly US sales in February 2023.

The automaker began selling a revamped version of its bestselling Model Y earlier this year but has not launched a new vehicle since the Cybertruck in 2023.

While the Cybertruck was the top-selling vehicle in the small EV truck market in 2024, the pickup has failed to boost Tesla’s sales numbers. In the first quarter of 2025, the company sold just 12,881 “other models,” which includes the Cybertruck, Model S, and Model X.

Michael Lenox, business professor and EV industry expert at the University of Virginia’s Darden School of Business, told BI that European and Chinese manufacturers now have EV models that are “eating into” the lead Tesla once had.

“We’ve just seen massive entry by all the global existing incumbent auto manufacturers,” he added.

Stephanie Valdez Streaty, director of industry insights at Cox Automotive, told BI that the number of EVs on the US market had ballooned from around 19 in 2020 to 78.

She said that this has made the launch of an affordable EV, which Tesla has said is set to go into production in the first half of 2025, even more crucial to the company.

“They need a new model that’s affordable because affordability has been a huge issue for consumers,” said Valdez Streaty.

She said that, with average new vehicle prices in the US now close to $50,000 and tariffs set to raise prices even further, the time is ripe for Tesla to launch a mass-market EV — especially as the company’s factories in the US could shield it somewhat from the tariffs.

“Tesla has said in the past that they are between two waves of growth, so they need something to propel them to that next growth wave,” said Valdez Streaty.

While some might consider a sub-$30,000 vehicle Tesla’s saving grace, Tucker said that the company hasn’t indicated its affordable EV will necessarily be a high-volume product. He said it would likely be a new version of a Model 3 or Model Y with a smaller battery or different battery technology.

“That’s not really a compelling high-volume product that’s going to win them a bunch of sales, at least in the United States,” Tucker said.

Release more advanced tech

Lenox said Tesla also needed to focus on “pushing the technology forward so they can get more capacity and lower cost out of the battery.”

Lenox told BI that Tesla’s Chinese competitor, BYD, not only has more models on the road but also dominates the battery value chain. BYD reported 416,00 deliveries in the first quarter Tuesday, far more than Tesla.

BYD’s latest advancement in charging strengthens its position as a leading global EV company, Lenox said.

BYD recently announced new chargers that it said could add almost 250 miles of range to an EV in five minutes. The 1,000 kW chargers are four times as powerful as Tesla’s current 250 kW chargers, which Tesla has said can add 200 miles of range in 15 minutes. Tesla plans to roll out 500 kW chargers this year, but that’s still half the output BYD claims to be able to provide.

Tucker added that Tesla has “nothing particularly exciting in the pipeline” on the tech front. Teslas are built on a 400-volt system, and most rivals are now built on an 800-volt system, which allows for faster charging and better performance.

While Tesla is due to launch its robotaxi service in Austin this summer, Tucker said that Tesla’s rivals have already launched robotaxis — and struggled to make them profitable.

“Maybe Tesla has some secret sauce that it can make it work in a way that GM didn’t,” Tucker said. “But even if it did, I don’t know that anyone goes out and buys a Tesla because they enjoyed driving in Tesla’s robotaxi,” he continued.

Ramp up advertising

Tesla has traditionally been reluctant to advertise, preferring to rely on Elon Musk’s social media and word of mouth.

He said in 2019 that he “hates” advertising, and the automaker only began ramping up its ads spending in 2023 after shareholders asked about it.

Tesla’s ad-lite approach may have worked when the company was the only EV game in town — but now that competition is on the rise and with the damage to Tesla’s brand mounting, Valdez Streaty said the automaker could benefit from a marketing blitz.

She said, “There’s more competition, and how do you kind of elevate your brand or your models when there’s so much out there?”

Tesla has benefited from endorsements from Musk’s ally, President Donald Trump. Last month, Trump marveled at a fleet of Tesla vehicles at a press event on the White House lawn. Commerce Secretary Howard Lutnick even told people to buy the dip as the company’s stock fell.

These were in response to protests, vandalism, and attacks against the company over Musk’s involvement with the administration and his other political interventions. Analysts have cited politics as part of the reason for the company’s stock decline.

Sales too, will likely be affected if the anti-Tesla movement continues, Tucker said.

“Not a lot of people are going to cross a picket line to buy a car,” he added.