AUSTIN, Texas: Tesla's early-year performance has taken a hit, as sliding sales, rising competition, and CEO Elon Musk's growing political influence weigh heavily on the brand.

The EV maker reported a 13 percent drop in first-quarter sales this week—its steepest year-on-year decline in nearly three years—delivering 336,681 vehicles compared to 386,810 a year earlier. Analysts had expected 372,410, according to Visible Alpha estimates, though some had braced for worse as forecasts darkened in recent days.

"We are not going to look at these numbers with rose-colored glasses...they were a disaster on every metric," said Dan Ives, analyst at Wedbush Securities. "The Street and us knew a bad 1Q was coming, but this was even worse than expected."

Tesla shares dipped another two percent following the announcement, continuing a prolonged slide that has wiped about 45 percent off the company's value since mid-December.

The weak quarter follows growing global backlash to Musk's public stances, including support for far-right political movements in the U.S. and Europe. In the U.S., Tesla has drawn criticism for Musk's role in sweeping federal job and program cuts. In Germany and France, protests have erupted and activists have targeted Tesla vehicles and showrooms. Some owners have even traded in their cars, seeking to distance themselves from Musk's increasingly polarizing profile.

This week, Musk-backed political spending came under fresh scrutiny after a left-leaning judge won a seat on Wisconsin's highest court, defeating a candidate supported by more than US$20 million from the billionaire. Local protests erupted, with demonstrators declaring that democracy was "not for sale."

Last year, Musk predicted 20 percent to 30 percent growth in 2025 and promised a new affordable EV model, but no details have emerged yet. Meanwhile, China's BYD is projected to surpass Tesla as the top global EV seller this year, with a 15.7 percent market share to Tesla's 15.3 percent, according to Counterpoint Research.

"There is no way to sugarcoat it," said Hargreaves Lansdown analyst Matt Britzman. "A drop from last year is no surprise, but the scale is worse than many had expected."

Tesla's Model Y refresh began rolling out in China, followed by the U.S. and Europe. However, its pricey Cybertruck has struggled, and nearly all units were recently recalled due to a panel defect.

Investors are watching to see if lower-cost models and incentives can revive sales amid intensifying competition from BYD, Volkswagen, and BMW.