Are Musk’s Politics Linked to Tesla’s Instability?

Elon Musk’s recent involvement in politics, particularly his alliance with President Trump—such as his role as Senior Advisor to the President—has significantly impacted his public image. Since the presidential inauguration, Americans’ perception of the billionaire has shifted, especially after Musk’s controversial gesture resembling a Nazi salute, which further fueled debates about his stance on the country’s evolving political agenda.

Elon Musk’s CEO figure is widely correlated with Tesla, Inc., so much that since the billionaire’s controversial political stance came to light, the company’s stocks have gone down considerably. Reports have noted that Tesla’s stock has fallen roughly 35–37% over a recent period, wiping out around $550 billion in investor wealth. This decline has been attributed in part to political backlash from Musk’s outspoken support for right-wing policies and Trump, which has alienated much of Tesla’s traditionally liberal customer base.

An interesting correlation has since developed: consumer psychology is affected by social and political conflicts. In this case: Musk’s vow to reduce the world’s consumption and reliance on fossil fuels, driven by EV cars dominating the automotive industry. 

This declaration of environmentalism (which appears contradictory considering SpaceX’s high consumption of fossil fuels and other Tesla production anti-environmentalist violations) was well appreciated by Democrat-aligned Americans and rather rejected by Republicans.

In spite of that, according to a report by the Wall Street Journal, as a consequence of the latest circumstances of Musk’s apparent alignment with fascist schemes and his far-right political statements, Tesla has now radically transformed the composition of its vehicle’s fanbase.

For the time being, Republicans have grown from 15% to 26% more likely to say they would purchase a Tesla car. In relation to this, the percentage of Democrats who had previously said they would buy a Tesla has declined remarkably from 23% to 13% only in February. 

Garth Ancier, a TV executive from Los Angeles, discussed with two fellow owners what it felt like to be seen in a Tesla. “They said, ‘You know, I’m getting uncomfortable driving this car around because it’s like driving a big red MAGA hat,’” Ancier said.

Tesla’s struggles extend beyond the U.S. market, as the company has also seen a significant decline in foreign sales. In February, new vehicle registrations in Europe dropped, with France experiencing a 26% decline and Germany plummeting by 76.3%. Meanwhile, Tesla China—responsible for most of the company’s exports—delivered just 30,688 new vehicles, marking a 49% decrease from last year’s export figures. While increased competition from other EV manufacturers has played a role in this downturn, Musk’s recent actions appear to be a key factor, particularly in Germany.

“When you play politics, there is always a risk,” an analyst with the automotive consumer-research firm JATO Dynamics, Felipe Munoz, expressed.