Elon Musk's political involvement is raising eyebrows and concerns among Tesla's investors and customers, with recent reports highlighting how his right-wing political actions are impacting the car manufacturer's sales and stock. A new report reveals Tesla's sales are down by 45% across Europe, traditionally one of its strongest markets, coupled with significant backlash against Musk's recent political statements and endorsements.
Analysts and branding experts are cautioning against mixing politics with business, emphasizing the potential harm to Tesla’s brand image. "It’s marketing 101: Don’t involve yourself in politics," said Robert Passikoff, a New York brand consultant. "People will stop buying your products." This advice seems to ring painfully true as the company faces declining profits and customer engagement.
Customer sentiment is shifting rapidly. John Parnell, a Model 3 owner from California, expressed his discontent, stating, "I don’t even want to drive it. He’s destroying the brand with his politics.” Parnell also decided to cancel his order for the highly anticipated Cybertruck, expressing his frustration directly linked to Musk's political stances.
Despite these disheartening sales reports, some analysts argue it’s too early to definitively blame Musk. Factors such as upcoming vehicle releases and increased competition from European and Chinese manufacturers are also at play. Tesla's Model Y, the company’s best-selling vehicle, is set to debut a new version this year, prompting some customers to delay purchases.
Auto analysts warn Musk’s casual approach to politics could be detrimental, emphasizing the heightened stakes now with increased competition. Morningstar analyst Seth Goldstein noted, "Musk thinks he can say anything he wants to and doesn’t think Tesla will suffer any consequences. Tesla was in the sweet spot. Now it has competition.” Analysis shows Tesla faced dramatic declines particularly in Germany and France, with nearly 60% fewer sales recorded.
The backlash against Musk's political activism is becoming more pronounced with Tesla’s marketing struggling amid accusations of alienation. Felipe Munoz, senior analyst at Jato, remarked, “Part of the population is not happy with his views, his political activism.” Once regarded as the darling of environmentally-conscious consumers, Tesla’s demographic is starting to shift as customers resonate less with Musk's right-leaning dynamic.
Recent statements from Musk, including his support for Donald Trump’s presidency and controversial remarks about various political figures, are causing many long-time customers to reassess their connection with the brand. This disconnect is particularly palpable as displayed by customers like Jens Fischer, who stated, "I will not buy a Tesla again. I think Musk is destabilizing democracy.” Fischer currently owns Model 3 and is unwilling to support the brand moving forward.
Further complicity arises as some Tesla showrooms are reportedly facing protests. Customers have been vocal with their discontent, even going so far as to vandalize vehicles and share stickers labeled with phrases like, “I bought it before Elon went nuts.” Actions against Musk’s public persona reached incidents as severe as hanging effigies or creating mock advertisements dubbing him as the face of “swasticars.”
The situation is not getting lost on investors either, with Tesla’s stock reflecting severe declines since Trump’s 2016 inauguration. Shares have dropped nearly 37%, equaling approximately $550 billion in loss of investor wealth. Tesla investor Ross Gerber aptly summarized the problem by stating, "People want to buy stuff... you don’t want politics involved. It's even worse when you have such divisive issues.”
That said, not all Tesla owners are willing to part with their vehicles, as some remain devoted fans of Musk and his vision. London resident Harry Chathli remains steadfastly loyal to Tesla and praises Musk as someone who has revolutionized transportation innovation, stating, "He’s transforming the way we think about transportation and the future of our planet." Yet, with the current market realities and sales figures, many are left wondering how long the loyalty from both consumers and investors will last under Musk’s increasingly controversial public approach.
Overall, Tesla's tumultuous situation reveals not just consumer behavior but also the challenges and risks associated with intertwining personal politics and product branding. With rising competition and wavering customer faith, the question remains: Can Tesla navigate this turbulent political atmosphere without significant long-term repercussions?