Tesla's CEO Elon Musk has assured investors that the company will see a return to growth this year following the first-ever decline in sales reported in 2024. However, challenges lie ahead as protests against Musk's ties to U.S. President Donald Trump and far-right politics in Europe have damaged Tesla's reputation, contributing to a 13% drop in quarterly deliveries and raising concerns among analysts about the future sales outlook.

The impact of recent controversies appears to be the main reason behind the decline in deliveries, according to Gene Munster, managing partner at Deepwater Asset Management. Munster predicts a 9% drop in deliveries compared to the previous year. Apart from political issues, Tesla is facing competition from other electric vehicle makers like BYD in China and is losing ground in Europe.

Although Tesla recently refreshed its Model Y and started deliveries in China, analysts still anticipate a 5% decrease in sales this year. There is uncertainty surrounding the launch of a cheaper Tesla model and its potential impact on sales and profits. Furthermore, logistical challenges and production disruptions have affected Tesla's operations, with the company aiming to boost delivery volumes with incentives and financial deals while sacrificing margins. Musk's earlier growth projections have been tempered, and it remains to be seen how Tesla will navigate the obstacles ahead.