Musk's Political Activities May Be Hurting Tesla Sales

Billionaire Elon Musk is closing government offices and gaining access to federal data and payment systems on behalf of President Trump. Meanwhile, sales of his Tesla electric vehicles (EV) are slumping in Europe and California. Auto analysts say his political activities appear to be a driving factor.  

In Germany, Musk critics have blasted him for his vocal support for a far-right political party. There, Tesla sales plunged 59% last month in year-over-year reports. They likewise dropped in France (63%), Sweden (44%), Norway (38%), the Netherlands (42%), and the UK (11%). This follows a trend of sliding sales in 2024. These declines occurred as demand for EVs is growing across much of Europe. Meanwhile, Tesla sales in California fell by 12% in January. The state has the largest car market in the US. 

Experts say it’s not clear how much Musk’s political actions are hurting Tesla. They also cite other reasons for the decline. New rivals bringing cheaper EVs to market is one. The slashing of tax breaks is a second. And the growing view among investors that Tesla’s once innovative lineup is growing stale is a third. 

But the impact of Musk’s public profile appears clear. Surveys show that EV owners and others who might purchase EVs have mixed opinions about Musk. Electrifying.com is an EV reviewer. Its poll showed that 6 in 10 British people who own EVs or want one said they wouldn’t buy a Tesla because of Musk. Brand Finance is a product valuation company. It said Tesla’s brand value declined 26% in 2024. It said that was because of Tesla's aging lineup and Musk's “antagonism.” 

During a January earnings call, one shareholder asked how much time Musk meant to spend at the White House vs Tesla.

Musk did not respond.   

Reflect: How might a CEO’s actions or beliefs impact a company’s success?