Few auto business executives are as intently recognized with the businesses they run as Tesla CEO Elon Musk, and arguably none are extra prolific in airing their political beliefs on social media.
However as Musk’s public persona has grown more and more right-wing, Tesla seems to be paying a worth in gross sales, particularly to liberal and left-leaning prospects who’re much more probably to purchase battery-powered automobiles than conservatives, in response to analysts and lots of automotive homeowners who responded to a questionnaire on The New York Instances web site about whether or not his habits affected their views of Tesla.
His picture as an erratic and impulsive supervisor seems to have influenced the automobiles, elevating questions amongst some about their high quality and serving to clarify why Tesla’s gross sales have been falling. On Tuesday, the corporate reported that its world gross sales within the second quarter fell 4.8% from the identical interval a yr earlier, after a drop of 8.5% within the first three months of the yr.
“Musk is an actual lightning rod,” stated Ben Rose, president of Battle Highway Analysis, who has a typically optimistic view of Tesla inventory. “There are individuals who suppose extremely of him and individuals who criticize him. To make certain, a few of his feedback are actually off-putting to some folks. For a subset, sufficient to make them purchase one other model.”
Tesla and a consultant for the corporate’s board of administrators didn’t reply to requests for remark.
Among the greater than 7,500 individuals who responded to The Instances’ questionnaire stated they have been offended by what they perceived as anti-Semitism on Mr. Musk’s half, one thing he denies. Some have been upset by the way in which Mr. Musk has dealt with Twitter, now referred to as X, since he purchased the corporate in 2022. He has fired 1000’s of staff and eliminated guardrails on content material shared on the social media platform. His more and more pleasant relations with former President Donald J. Trump and different conservative figures have been additionally cited as considerations. A big majority of readers who responded to the questionnaire have been important of Mr. Musk.
“You are principally driving round in a large purple MAGA hat,” stated Aaron Shepherd, a Microsoft product designer in Seattle, who stated he deliberate to purchase an electrical Volkswagen ID.4 as a substitute of a Tesla.
It’s not doable to know what worth Tesla has paid for Musk’s political statements and actions. What is evident is that Tesla, as soon as the dominant vendor of electrical automobiles worldwide, has misplaced market share in lots of international locations for quite a lot of causes. Chief amongst them is the corporate’s reliance on the Mannequin Y sport-utility car and the Mannequin 3 sedan, which haven’t been considerably up to date in years, for practically all of its gross sales. Different firms are luring consumers by introducing new or up to date automobiles extra ceaselessly.
In China, home automakers comparable to BYD have gained floor on Tesla by providing extra inexpensive automobiles with options that attraction to Chinese language shoppers, comparable to karaoke. In Europe, BMW, Volkswagen and different native manufacturers are discovering success by providing automobiles which are extra luxurious or cheaper than Tesla. And in the USA, Hyundai-Kia, Ford Motor and Basic Motors have boosted gross sales by providing an ever-widening choice of fashions.
Instances readers who responded to the net questionnaire stated that they had been delay by Musk’s remarks and by their expertise with Tesla’s automobiles and repair operations (the corporate sells and repairs automobiles straight, somewhat than by dealerships).
“There was a time once I would have given Musk an organ if he wanted one,” stated Tim Yocum, an engineering director at a software program firm. However Yocum, who lives in Chicago, stated he had had issues together with his Tesla Mannequin S and had been dissatisfied with the corporate’s restore and upkeep providers. Musk’s shift to the appropriate has additionally rankled him.
“Tesla is the one producer in fashionable occasions that has unabashedly allowed its CEO to dwell as much as his good identify,” Yocum stated. “This automotive would be the final Tesla he owns.”
Such feedback assist make clear surveys that say Tesla’s repute has suffered just lately. The corporate fell to 63rd place within the 2024 Axios Harris Ballot 100, which requested respondents about their opinions on company manufacturers. In 2021, the corporate was in eighth place.
Musk has maintained that his public statements and picture don’t have an effect on Tesla’s gross sales. “We make the most effective automobiles,” he stated on the Instances’ DealBook Summit in November. “Whether or not you hate me or like me or are detached, would you like the most effective automotive or not?”
Musk nonetheless has many passionate followers, and a few stated the chief’s public statements wouldn’t affect their choice to purchase a Tesla. Many individuals credited him with pushing the auto business towards producing electrical automobiles, a robust device in combating local weather change.
“He has run an organization that has managed to destabilize a corrupt and lazy automotive business,” stated Julian Mehnle, a software program engineer who lives in San Francisco. Whereas not a Musk fan, Mehnle stated, “I’m an grownup sufficient to separate these considerations from my alternative of shopper merchandise.”
Robert Dean, an architect dwelling in Redding, Connecticut, echoed these sentiments: “Musk is a big, disruptive expertise with a transformative and optimistic impact on the world we dwell in. He additionally has an eccentric character, however I’m not marrying him; I’m shopping for automobiles from an organization he runs brilliantly.”
Most Tesla shareholders stay largely supportive of Musk. Final month, traders backed by a large margin a $45 billion compensation plan for him.
But automotive consumers The Instances heard from and analysts stated Musk’s political exercise had clearly broken the corporate’s repute amongst left-leaning shoppers. And there’s little proof that Musk’s shift to the appropriate has attracted extra conservatives to purchase Teslas. Actually, 77 % of Republicans and Republican-leaning voters stated this yr that they weren’t excited about battery-powered automobiles, up from 70 % who stated the identical final yr, in response to the Pew Analysis Middle.
“He could also be profitable over some individuals who like his place,” stated Greg Silverman, world head of brand name economics at Interbrand, a consulting agency that advises purchasers on advertising methods. However, he added, the percentages that Musk is attracting extra prospects somewhat than alienating them “are very low.”
Interbrand analysis signifies {that a} CEO or different firm consultant who offends prospects can scale back gross sales by as a lot as 10 %, Silverman stated.
Some automotive homeowners’ considerations went past Musk’s political statements. They cited allegations of racial discrimination at Tesla factories or the notion that he has allowed racist content material to flourish at X. Tesla has denied that it tolerates discrimination at its factories.
“My mom was severely contemplating shopping for a Tesla,” stated Achidi Ndifang, who works in info expertise in Baltimore. “As a black individual, I felt it might be an insult for my mom to drive a Tesla.”
Derek Morf, a highschool math instructor in Verona, N.J., who owns a Tesla, stated he was alarmed when Tesla eliminated the Disney Plus app from some dashboard screens late final yr, apparently as a result of Musk was offended with Robert A. Iger, Disney’s chief govt.
Morf did not care a lot for the Disney app, which he barely used. However, he stated, he discovered it disturbing “that the car I purchased may have its options modified instantly just because one man had a lot management.”
These considerations could possibly be a drag on Tesla, which is pouring assets into self-driving expertise. Musk has promised to unveil a self-driving taxi on August 8. The expertise can not succeed with out shopper belief.
Many Instances readers identified that different automotive firms have been having issues, too. Volkswagen had an emissions scandal just a few years in the past. Henry Ford, the founding father of Ford Motor, held and unfold anti-Semitic views. A decade in the past, GM bought automobiles with defective ignition switches that have been blamed for greater than 100 deaths.
Established automotive firms proceed to promote gasoline-powered automobiles that emit greenhouse gases and different pollution. Tesla sells solely electrical automobiles.
However most likely no different auto govt at this time has a megaphone as loud as Musk’s, or is extra keen to make use of it.
“If folks suppose that CEOs of different firms are saints, for my part they’re a bit naive,” stated Jan Leys, proprietor of Tesla in Zurich. “They simply don’t have as large a mouth or as large a platform as Elon Musk.”