Tesla stock (NASDAQ: TSLA) has dropped more than 13% since the inauguration of President Donald Trump last month. That decline has as much to do with the company’s performance as it does with the politics of CEO Elon Musk.
In fact, Tesla’s financials and brand reputation are now inseparable — and that could spell disaster for the electric vehicle company’s future. Recent sales data in key markets makes that clear.
Musk Goes Hard for the Hard Right
Tesla sales are down in three key markets: California, Britain, and Germany — countries and states where he’s taken an aggressive stand in local politics.
Michael Jordan, who transformed the footwear and athleisure industries, famously said, “Republicans buy sneakers, too.” Well, Democrats buy EVs too — in fact, at a higher rate than Republicans.
But Musk, in an act symbolizing his rejection of all things blue, moved his company from California to Texas, and then moved to bankroll the Republican presidential candidate to the tune of over $100 million. He’s now preoccupied with capturing the U.S. government and reshaping it according to his whims.
In Germany and the United Kingdom, Musk has supported not mere center-right forces, but explicit far-right groups. After making a gesture last month that resembled a Nazi salute, few bought Musk’s excuse that he was gesturing his heartfelt devotion to the crowd.
After all, the obscenity took place between his December endorsement of the far-right AfD party — in Germany, of all places — and his formal address to it weeks later. In a tweet, Musk proclaimed, “Only the AfD can save Germany.” All that Musk may now be missing is a tiny mustache.
Tesla Sales Fall Where Musk Interferes in Politics
The political antics of the world’s richest man are now hurting the automobile company he built to success.
In California, new Tesla registrations fell by 12% last year, bucking a trend of a rise in EV sales in the largest U.S. market for EVs and a leader in incentives for lower-emissions vehicles.
Tesla sales fell by 59.5% in Germany in January, according to new vehicle registration data from the country, outpacing the overall decline in car sales by 20-fold.
Also in January, for the first time ever, Chinese EV company BYD sold more cars in the United Kingdom than Tesla.
The Road Ahead for Tesla
Now, as Tesla’s automotive revenue declines — as its latest financials show — Musk is looking to rebrand the automaker as a technology company, with its CEO making fantastical — and arguably unhinged claims — in its most recent earnings call.
Musk said that Tesla’s investments in artificial intelligence and robotics could one day make it not only “the most valuable company by far” — but also “worth more than the next five companies combined.”
Known for overpromising and underdelivering, Musk claimed that Tesla will have “an epic 2026 and a ridiculous 2027 and 2028.”
Musk’s devotees view it as an ecstatic utterance by their oracle-in-chief. But that’s language one expects from a teenage TikToker, not the CEO of a $1 trillion company.
Clearly, Musk’s words and actions have not only brought great social and political harm, but they are also now beginning to hurt his biggest business.
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