Elon Musk’s policies may be driving some buyers away from Tesla
Few car executives are as closely tied to the companies they manage as Tesla CEO Elon Musk. And perhaps no one is as prolific in expressing his political views on social media.
But as Musk has moved increasingly to the right in public life, Tesla appears to be paying a price in sales. That’s especially true among liberal and left-leaning customers who are far more likely to buy battery-powered cars than conservatives, according to analysts and many car owners who responded to a survey on The New York Times website about whether his behavior has affected their opinions of Tesla.
His image as an erratic, impulsive executive seems to have rubbed off on the cars, raising doubts among some about their quality and helping to explain why Tesla’s sales have been falling. On Tuesday, the company reported that global revenue fell 4.8 percent in the second quarter compared to the same period a year earlier, following an 8.5 percent decline in the first three months of the year.
“Musk is a real lightning rod,” said Ben Rose, president of Battle Road Research, which generally has a positive view of Tesla’s stock. “There are people who swear by him and people who swear at him. There’s no doubt that some of his comments are a real turn-off for some people. For a portion of the group, that’s enough to make them buy another brand.”
Tesla and a representative of the company’s board of directors did not respond to requests for comment.
Some of the more than 7,500 people who responded to The Times survey said they were offended by what they saw as anti-Semitism from Musk, which he denies. Some were upset about the way Musk has managed Twitter, now X, since buying the company in 2022, laying off thousands of employees and removing restrictions on content shared on the social media platform. His increasingly friendly relations with former President Donald J. Trump and other conservative figures were also cited as concerns. A large majority of readers who responded to the survey were critical of Musk.
“You’re basically driving around with a giant red MAGA hat,” says Aaron Shepherd, a product designer at Microsoft in Seattle. He says he plans to buy an electric Volkswagen ID.4 instead of a Tesla.
It is not possible to know what price Tesla has paid for Mr. Musk’s political statements and activities. What is clear is that Tesla, once the dominant seller of electric vehicles worldwide, has lost market share in many countries for a variety of reasons. Chief among them is the company’s reliance on the Model Y sport utility vehicle and Model 3 sedan, which have not been substantially updated in years, for almost all of its sales. Other companies lure buyers by introducing new or updated cars more frequently.
In China, domestic automakers like BYD have gained ground on Tesla by offering more affordable cars with features that appeal to Chinese consumers, such as karaoke. In Europe, BMW, Volkswagen and other local brands are doing well by offering more luxurious or cheaper cars than Tesla. And in the United States, Hyundai-Kia, Ford Motor and General Motors have increased sales by offering a growing selection of models.
Times readers who responded to the online survey said they were put off by Musk’s comments and by their experiences with Tesla’s cars and service business. The company sells and services cars directly, rather than through dealers.
“There was a time I would have given Musk a body if he needed one,” said Tim Yocum, a software company engineering executive. But Mr. Yocum, who lives in Chicago, said he had had problems with his Tesla Model S and was unhappy with the company’s repair and maintenance services. Mr. Musk’s rightward drift has also angered him.
“Tesla is the only manufacturer in modern times that has allowed its CEO to betray his good name without mercy,” Mr. Yocum said. “This car will be the last Tesla I own.”
Such comments help illuminate surveys that say Tesla’s reputation has been tarnished recently, with the company dropping to 63rd place in the 2024 Axios Harris Poll 100in which respondents were asked about their opinions on corporate brands. In 2021, the company was ranked eighth.
Mr. Musk has insisted that his public statements and persona have no bearing on Tesla’s sales. “We make the best cars,” he said in November at The Times’ DealBook Summit. “Whether you hate me, like me or don’t care, do you want the best car or not the best car?”
Mr. Musk still has many passionate admirers. And some said the CEO’s public statements would not influence their decision to buy a Tesla. Many credited him with pushing the auto industry toward electric vehicles, a powerful tool in combating climate change.
“He’s led a company that has successfully disrupted a corrupt, lazy auto industry,” said Julian Mehnle, a software engineer who lives in San Francisco. While he’s no fan of Musk, Mehnle said, “I’m mature enough to separate those concerns from my choices in consumer products.”
Robert Dean, an architect who lives in Redding, Connecticut, echoed those sentiments: “Musk is a tremendous, disruptive talent whose impact is transformative and positive on the world we live in. He’s also an oddball, but I’m not marrying him; I’m buying cars from a company he runs brilliantly.”
Most Tesla shareholders remain largely supportive of Mr. Musk. Last month, investors overwhelmingly backed a $45 billion compensation plan for him.
Still, car buyers The Times heard from and analysts said Musk’s political activities had clearly damaged the company’s reputation among left-leaning consumers. And there’s little evidence that Musk’s rightward turn has attracted more conservatives to buy Teslas. In fact, 77 percent of Republicans and Republican voters this year said they were not interested in battery-powered cars, 70 percent who said the same thing last yearaccording to the Pew Research Center.
“He may win over some people who like his views,” said Greg Silverman, global director of brand economics at Interbrand, a consultancy that advises clients on marketing strategies. But, he added, the chances of Musk attracting more customers rather than driving them away “are very slim.”
Research from Interbrand shows that a CEO or other company representative who insults customers can reduce sales by as much as 10 percent, Silverman says.
Some car owners’ concerns went beyond Musk’s political statements. They cited allegations of racial discrimination in Tesla factories, or the perception that he has allowed racist content to flourish on X. Tesla has denied that it tolerates discrimination in its factories.
“My mother seriously considered buying a Tesla,” said Achidi Ndifang, who works in information technology in Baltimore. “As a black person, I thought it was insulting if my mother drove a Tesla.”
Derek Morf, a high school math teacher in Verona, New Jersey, who owns a Tesla, reported feeling anxious when Tesla the Disney Plus app has been removed from some dashboard screens late last year, apparently because Musk was angry with Disney CEO Robert A. Iger.
Mr. Morf didn’t much care for the Disney app, which he rarely used. But, he said, he found it disturbing “that the functions of the vehicle I bought could be changed in an instant, just because one man had so much control.”
Such concerns could be a burden for Tesla as the company pours money into autonomous driving technology. Mr. Musk has promised to unveil a self-driving taxi on Aug. 8. The technology can’t succeed without consumer trust.
Many Times readers pointed out that other auto companies had a problem too. Volkswagen had an emissions scandal a few years ago. Henry Ford, the founder of Ford Motor, held and spread anti-Semitic views. A decade ago, GM sold cars with faulty ignition switches that were responsible for more than 100 deaths.
Established car companies still sell gasoline-powered cars that emit greenhouse gases and other pollutants. Tesla only sells electric cars.
But probably no other current driver has as loud a megaphone as Musk, or is more willing to use it.
“If people think that the CEOs of other companies are saints, they are a bit naive in my opinion,” said Jan Leys, a Tesla owner in Zurich. “They just don’t have as big a mouth and/or platform as Elon Musk.”
