Tesla, like all major companies, outlines potential risks to investors each year, listing everything from legal battles to supply chain issues, the Associated Press reports.
However, one emerging challenge—CEO Elon Musk’s increasing involvement in right-wing politics—was largely absent from its latest annual report, despite growing concerns that it could alienate customers and hurt sales.
Tesla’s global sales have taken a hit, with a 45% drop in Europe in January, according to research firm Jato Dynamics. The company has also seen declining numbers in California, its largest US market, and reported its first annual sales decline globally last year.
While some analysts attribute the slowdown to market factors—such as customers waiting for the new Model Y or increased competition from European and Chinese automakers—others argue that Musk’s political stance is a growing liability.
“Musk thinks he can say anything he wants and doesn’t think Tesla will suffer any consequences,” said Morningstar analyst Seth Goldstein. “Tesla was in the sweet spot. Now it has competition.”
Historically, Tesla’s customer base has included wealthy, environmentally conscious professionals, many of whom identified as politically liberal. However, Musk’s outspoken political views and recent endorsement of Donald Trump have alienated some of these buyers.
“I don’t even want to drive it,” said John Parnell, a Model 3 owner from California, who also canceled his Cybertruck order. “He’s destroying the brand with his politics.”
In Europe, Tesla’s sales figures have suffered particularly in Germany and France, where January sales plummeted by about 60%. In February, France saw an additional 26% decline. Some customers have even joined protests, vandalized Tesla showrooms, or placed stickers on their cars reading:
“I bought it before Elon went nuts.”
Tesla’s stock has also suffered, falling nearly 37% since Inauguration Day, amounting to a $550 billion loss in market value. Investors like Ross Gerber, whose portfolio includes $60 million in Tesla stock, believe Musk’s political activism is damaging the brand.
“People want to buy things that make them feel good,” said Gerber. “It’s even worse when you have such divisive issues.”
Despite the backlash, some loyal Tesla owners remain unmoved by Musk’s politics. Harry Chathli, a Tesla Model S owner in London, praises Musk as a visionary who has transformed the automotive industry.
