Key points
- Public dissent has tarnished Tesla’s brand image
- Model 3 sales declined by 33pc across all of Europe
- Sellers have capitalised on Tesla’s decline, amassed profits of $16.2b
ISLAMABAD: Elon Musk, the visionary CEO of Tesla, has long been a polarising figure in the tech industry. His recent foray into politics, particularly his involvement with the Trump administration, has sparked a significant backlash, leading to widespread boycotts of Tesla vehicles.
This public dissent has not only tarnished Tesla’s brand image but has also resulted in tangible financial repercussions for the company, according to the Guardian.
Musk’s appointment to the Department of Government Efficiency (DOGE) under President Trump marked a turning point in public perception.
Critics argue that his political alignment with the far-right and active participation in governmental affairs contradict Tesla’s previously progressive image.
Tesla’s boycott
This dissonance has alienated a substantial portion of Tesla’s customer base, traditionally composed of environmentally conscious and socially liberal individuals.
The repercussions of the boycott are evident in Tesla’s financial metrics. The company’s stock has experienced a precipitous decline, plummeting by 37 per cent, according to NPR.
Moreover, Tesla’s sales in Europe dropped by 45 per cent in January, as reported by research firm Jato Dynamics, despite a rise in overall electric vehicle sales, according to AP news.
Sales figures were especially poor in Germany and France in January, with a drop of about 60 per cent in each country, exceeding the average decline across the 24+ European countries surveyed. In France, sales fell another 26 per cent in February.
Model 3 decline
Even more concerning was the performance of Tesla’s individual models. Sales of the Model 3 declined by 33 per cent across all of Europe, despite the fact that the car has not been updated and there’s no apparent reason for buyers to hold off.
“Part of the population is not happy with his views, his political activism,” said Jato senior analyst Felipe Munoz who had shrugged off the boycott threat earlier this year, but is now having second thoughts.
This decline follows a report of falling sales in California, Tesla’s largest US market, and marks the company’s first global annual sales decline last year.
This downturn has been exacerbated by a broader market retreat from tech stocks, but Tesla’s association with Musk’s political activities has intensified the sell-off.
Short sellers have capitalised on this decline, amassing profits totalling $16.2 billion over the past three months, according to a report by the Financial Times.
Musk’s political stance
Sales figures mirror this downward trend. In Europe, Tesla’s market share has eroded significantly, with sales dropping by nearly 50 per cent, according to Market Watch.
This decline is particularly pronounced in countries like Germany, where Musk’s endorsement of the far-right Alternative for Germany (AfD) party has led to public outcry and diminished consumer interest.
A survey revealed that 94 per cent of German respondents would not consider purchasing a Tesla, underscoring the profound impact of Musk’s political stance on consumer behaviour, according to Euro Weekly News.
Public protests
The boycott has manifested in various forms of public protest. In Wales, activists used a Tesla vehicle to etch a massive “Don’t buy a Tesla” message on a beach, visible from aerial views, according to Daily Mail.
This act of defiance was spearheaded by a former Tesla owner disillusioned with Musk’s political affiliations.
In the United States, demonstrations have erupted at Tesla dealerships nationwide. Protesters have voiced their discontent with Musk’s political involvement, viewing it as a threat to democratic principles.
Acts of vandalism
These protests have occasionally escalated into acts of vandalism, further straining Tesla’s public image.
Investor confidence in Tesla has been shaken. Analysts have revised their forecasts, with some reducing price targets and delivery estimates for the upcoming quarters.
Concerns over Musk’s political entanglements diverting attention from Tesla’s core business operations have been cited as factors influencing these adjustments.
The company’s valuation has suffered accordingly. Tesla’s market capitalisation has fallen by approximately $700 billion, a stark indicator of the financial community’s apprehension regarding the company’s direction under Musk’s leadership, according to Reuters.
