Elon Musk’s controversial role in the Trump administration as head of the Department of Government Efficiency (DOGE) is facing significant backlash, potentially impacting Tesla’s brand image and sales during a critical period for the electric vehicle (EV) industry.
Recent protests, dubbed “Tesla Takedown” and “Tesla Takeover,” organized by groups like Anonymous on Bluesky, have taken place at Tesla dealerships globally. Protesters voiced concerns over Musk’s political involvement, alleging his actions are detrimental to democracy and potentially linked to fascism. Demonstrations featured slogans such as “Musk is stealing from you,” “Stop Musk’s Coup,” and “Tesla funds fascists.” These protests spanned from New York City and Boston to Tesla’s headquarters in Austin, Texas, with organizers urging individuals to divest from Tesla stock and join the protests.
Musk’s leadership at DOGE has been marked by substantial government employee layoffs, resulting in numerous lawsuits challenging the legality of these dismissals. Public opinion, as reflected in recent surveys, indicates growing disapproval of Musk’s political activities.
A Quinnipiac poll revealed that 53% of voters oppose Musk’s prominent role in the Trump administration. Furthermore, a survey by the American EV Jobs Alliance, a bipartisan group focused on EV adoption, found that Musk holds a 35% positive rating among EV drivers, with a notably lower approval among female respondents.
Industry experts suggest that Musk’s shift in public perception from “EV Jesus” to a figure associated with the “Make America Great Again” (MAGA) movement is negatively impacting Tesla’s brand. Mike Murphy, CEO of American EV Jobs Alliance, argues that Musk’s political identity overshadows his association with electric vehicles, posing challenges for Tesla’s marketing efforts.
This sentiment is reflected in a survey of likely EV buyers, where Tesla received the lowest favorable rating (63%) and the highest unfavorable rating (37%) compared to competitors like Ford, Toyota, and VW.
The timing of this controversy coincides with potential cuts to federal EV tax credits under the Trump administration, increasing competition for Tesla with foreign automakers. Such cuts could significantly impact the entire EV industry, particularly Tesla, given its reliance on an all-EV product line.
Internal concerns within Tesla regarding Musk’s impact on the company’s brand have also surfaced. A recording of a staff meeting obtained by the Washington Post revealed employee anxieties and suggestions that Tesla might benefit from Musk’s resignation.
Tesla’s preliminary sales figures already indicate a negative trend in certain regions. January registrations in Germany plummeted by nearly 60% compared to the previous year, following Musk’s interactions with the far-right AfD party. Similar declines were observed in France, Norway, and the UK.
Oppenheimer analyst Colin Rusch warns that Musk’s political engagements pose a significant risk to Tesla’s sales, particularly in California and the European Union, where the company has experienced declining sales since early 2023. Softening sales in China and the EU further exacerbate these concerns. The confluence of Musk’s political activities and potential changes to EV tax credits creates a challenging environment for Tesla’s future prospects.
