The electric vehicle manufacturer Tesla, until recently an undisputed symbol of disruptive innovation and dizzying growth, now stands at a critical crossroads. A combination of deep management turmoil, disappointing sales figures, and the rapid maturation of the electric vehicle market is forcing the company, led by Elon Musk, to navigate a more complex reality than ever before. As the company bets on entering new markets and developing a lower-cost model, fundamental questions arise about its ability to maintain its dominant position and return to the growth trajectory that once defined it.

A Troubling Wave of Departures in Senior Management

One of the most alarming signs of internal instability at Tesla is the wave of executive departures over the past year, which recently culminated in the exit of Troy Jones. Jones, who served as Vice President of Sales, Service, and Delivery in North America—the company’s largest and most important market—left his position after 15 years. Media reports directly link his departure to “demand problems” and declining sales amid growing competition from manufacturers offering more affordable alternatives. Jones’s departure is not an isolated event but the latest link in a long chain of departing senior executives. The list includes key figures such as Omead Afshar, a confidant of Musk who was reportedly fired; Drew Baglino, the chief battery engineer; Rohan Patel, the head of global public policy; Milan Kovac, head of the Optimus humanoid robot program; and Jenna Ferrua, head of HR for North America. This extensive talent drain, reportedly stemming from mass layoffs that damaged morale and the controversy surrounding Musk’s political activities , raises serious concerns among investors and analysts about Tesla’s “internal stability” and its ability to “revive sales momentum.” As of the latest reports, neither Tesla nor Jones has provided an official comment on the departure, a silence that leaves the market to rely on speculation and external reporting.

A Tale of Two Products: The Cybertruck’s Failure and the Model Y’s Slowdown

The management challenges are occurring against a backdrop of polarized product performance. The most resounding failure is that of the Cybertruck. The futuristic pickup, which promised to conquer the market, is recording a sharp decline in sales. After delivering approximately 13,000 units in the last quarter of 2024, deliveries plummeted to around 7,100 units in the first quarter of 2025, and according to analyst estimates, to only about 5,000 units in the second quarter. An annual sales pace of about 20,000 units represents less than 10% of the factory’s planned production capacity of over 250,000 units per year. The Cybertruck, which has suffered from eight recalls, reliability issues, and a failure to meet original range promises , now sells less than its direct competitors, the Ford F-150 Lightning and General Motors’ electric trucks. Meanwhile, even the company’s flagship, the Model Y, is showing signs of a slowdown. Although it remains the best-selling electric vehicle in the U.S. , its sales in the U.S. in the second quarter of 2025 fell by 15% compared to the previous year, standing at approximately 86,000 units. Despite the decline, the Model Y and Model 3 together still hold a significant 43% share of the entire U.S. electric vehicle market.

A Maturing Market: Growing Competition and Subsidies Nearing Their End

Tesla’s difficulties are not happening in a vacuum but reflect broader trends in the American EV market. The entire market is experiencing a slowdown, with a 6.3% year-over-year decline in sales in the second quarter of 2025, signaling a “more mature market.” Concurrently, Tesla’s dominance is consistently eroding. Its market share, which stood at nearly 80% in 2019, has dropped to about 44.7% in the first half of 2025. The resulting vacuum is being filled by legacy automakers, led by General Motors, which has doubled its EV sales and captured a market share of 12.9%. Looming over all of this is the approaching “subsidy cliff”: the federal tax credit of up to $7,500 for a new electric vehicle is set to expire on September 30, 2025. Analysts widely predict that this will lead to a short-term surge in demand in the third quarter as consumers rush to take advantage of the credit, but will be immediately followed by a “collapse” or a sharp drop in demand in the fourth quarter and early 2026 as the market adjusts to the new, higher effective prices.

Strategic Bets for the Future: India and the Search for an Affordable Model

In an attempt to reignite its growth engines, Tesla is turning to two strategic directions, but both carry considerable risk. The first is entering the Indian market, which officially began this month with the opening of a showroom in Mumbai. However, this is more of a “brand-planting” move than a mass-market sales initiative. The Model Y, imported from China, is priced in India starting at around $70,000 due to heavy import duties. This pricing places Tesla in the small and competitive luxury segment and is not expected to generate significant sales volume in the near term, especially given the country’s nascent EV market and lack of adequate charging infrastructure. The greater hope lies in the second move: launching a lower-cost model. However, here too, the plans have changed substantially. Instead of an entirely new vehicle priced around $25,000, Tesla is expected to launch “stripped-down” and cheaper versions of the existing Model 3 and Model Y. The cost savings will be achieved by using cheaper interior materials and removing features like a rear screen and heated seats. The move is designed to utilize existing production lines and launch the models quickly, but the timeline remains vague. The company stated that production would begin in the “first half of 2025,” a deadline that has already passed, leading to speculation about further delays in the plan.

A Look Ahead

Tesla is facing complex, head-on challenges. The instability in its leadership, the polarized performance of its products, growing competition, and the end of the government subsidy era are creating a perfect storm. Its strategic responses—a cautious entry into India and a concentrated effort to launch a more affordable model—are necessary but carry significant risks of eroding profitability and diluting the brand. The coming quarters, especially the upcoming earnings report and the sales figures from the fourth quarter (the first without the tax credit), will be a critical test of Tesla’s ability to navigate the transition from a disruptive growth phenomenon to a mature and competitive player in the global automotive industry.