Musk says Tesla sees demand rebound after sales decline

Elon Musk announced on May 20, 2025 that Tesla is seeing a rebound in demand after a decline in sales earlier this year.

This decline was linked to criticism of Musk’s political affiliations and leadership decisions.

Musk said that sales are “bouncing back,” but he did not provide specific figures.

He also revealed plans to begin rolling out “unsupervised” full self-driving services in Austin, Texas, starting in June.

🔗 Source: Axios

🧠 Food for thought

1️⃣ Tesla’s “rebound” claim follows significant market share erosion

Musk’s statement about a “major rebound in demand” comes after Tesla experienced substantial market share losses both domestically and globally.

Tesla’s share of the U.S. EV market has fallen dramatically from 75% in Q1 2022 to just 43.5% in Q1 2025, reflecting intensifying competition from traditional automakers 1.

On the global stage, Tesla’s position has similarly weakened, with its market share dropping from 13.2% in 2023 to 10.3% in 2024, while Chinese manufacturer BYD claimed the top spot with a commanding 22.2% share 2.

The company’s actual sales volumes declined by an estimated 37,000 units in 2024, even as the broader EV market reached record highs with 1.3 million vehicles sold in the U.S. alone 3.

This context reveals that any “rebound” Tesla might be experiencing likely represents a recovery from a significant downturn rather than growth beyond previous peak performance levels.

2️⃣ EV market competition has intensified beyond Tesla’s early dominance

The electric vehicle landscape has transformed dramatically from Tesla’s early days of market dominance into a hypercompetitive environment with multiple strong players.

Ford’s Mustang Mach-E and Hyundai’s Ioniq 5 have emerged as the best-selling EVs outside of Tesla, while newcomers like the Honda Prologue debuted impressively with over 33,000 sales in its first year 3.

Traditional automakers are gaining traction, with BMW leading European EV sales (535,586 units) and General Motors overtaking Ford in the U.S. market during 2024 thanks to successful launches of models like the Equinox EV and Blazer EV 1, 2.