Elon Musk's Tesla problem just got worse

Once the darling of the electric vehicle world, Tesla (TSLA) has taken a fall this year — and it's one CEO Elon Musk is struggling to correct.

While many blame Tesla's struggles on Musk's involvement in political matters, if you follow the EV company closely, you already know that it already faced problems back in 2024.

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That year, Tesla delivered less vehicles — about 1.79 million vehicles in 2024, down 1.1% from 2023 — marking its first-ever full-year sales drop.

But that merely foreshadowed what was to come.

After Musk joined The White House as a special government employee to run the Department of Government Efficiency (DOGE), his attention was fully focused elsewhere — and that had a painful effect on Tesla.

When the EV company shared its Q1 results in an earnings call on April 22, it reported a 20% decline in revenue. And with the $7,500 tax credit for electric car buyers expiring come October, it's likely to deal Tesla another blow.

On top of all that, now Musk has another problem to deal with — and it's revealing that people who once had great faith in Tesla are losing hope.

Tesla loses another key figure

Sales, Service and Delivery Vice President Troy Jones has left the company, per reporting from The New York Times.

Jones, who led Tesla North America, had been with the company for 15 years and has always been a passionate supporter of Tesla's vision on his social media platforms.

Now Jones joins a list of several key Tesla leaders who have departed this year, including Musk top aide Omead Afshar, HR Director for North America Jenna Ferrua, and Vice President of Engineering Milan Kovac, who oversaw Tesla's Optimus development.

Musk has also sustained losses at one of his other companies. Last week, X CEO Linda Yaccarino stepped down after only two years with the company, saying on Twitter, “I’m incredibly proud of the X team — the historic business turnaround we have accomplished together has been nothing short of remarkable.”

Musk replied with “Thank you for your contributions,” taking a tone that elicited much discussion over the state of the business relationship between the two.

Longtime Musk fans criticize his direction

Musk has many vocal supporters in the investing world, including Wedbush Securities analyst Dan Ives and Ark Invest CEO Cathie Wood.

But despite heaping praise on Musk in the past, even these fans seem to have lost a bit of faith.

“Very simply, Musk diving deeper into politics and now trying to take on the Beltway establishment is exactly the opposite direction that Tesla investors/shareholders want him to take during this crucial period for the Tesla story,” Ives wrote recently, leading Musk to tweet “shut up” to Ives a few days later.

Wood, whose Ark Invest ETF holds its largest weight in Tesla stock at 9.78%, has remained staunchly devoted to her outlook on Musk and his companies.

Wood’s funds bought 115,400 shares of Tesla on July 16 in two funds, the ARK Innovation exchange-traded fund and the ARK Next Generation Internet ETF.

“Harnessing breakthroughs in AI, robotics, and energy storage, @elonmusk is the most productive human being on earth and in space in history. Facts are facts,” she tweeted on July 9.

In the meantime, Musk hasn't paid much attention to Jones' departure or any of the rest of these facts. He's been busy on X promoting new features in Grok, his AI service intended to compete with OpenAI.

Musk's most recent innovation there is Companions, a free-to-try service in-app that will cost SuperGrok subscribers $30 per month for the full set of features. For now, users can check out Ani, a sexy blonde anime girl, or Rudi, a rowdy red panda. A third male avatar is coming soon.

Musk promises that customizable companions are also coming soon, per a tweet from this morning.