Tesla's Tumultuous Journey: How Elon Musk's Political Allegiances are Impacting the Electric Car Giant
Since Elon Musk became a prominent supporter and chief advisor of Donald Trump, Tesla has experienced significant turmoil in its operations and sales. In 2024, for the first time in 13 years, sales of electric vehicles plummeted, exacerbating the company's challenges in key markets, including Europe and China. While competition and long-term strategic decisions have been underlying issues, the brand's association with Trump and Musk's controversial political stances have further intensified these difficulties.
Tesla remains the world's leading electric car manufacturer, contributing substantially to Musk's wealth; approximately 60% of his fortune is tied to Tesla stock. Following Trump's presidential win in November 2024, there was a surge in Tesla's stock prices, as investors believed that Musk's backing of Trump would lead to favorable economic benefits for his companies, which collectively spent $270 million to support the Trump campaign. However, this optimism has diminished, as Musk also took on a controversial government role that included initiating a program of public employee layoffs, catapulting him into a highly polarizing position in U.S. politics.
Despite the initial rise in stock prices, Tesla shares have since seen a steep decline. Once valued at $480 in the wake of the election, they dropped to $235, causing Musk to lose more than $150 billion in personal wealth. While the stock market data might suggest a return to pre-election levels, it's coupled with troubling sales figures and consumer sentiment.
Global sales of Tesla vehicles fell by 1% in 2024, despite an overall 25% rise in electric car sales. In the U.S., sales dipped by 7% for the year and by an additional 2% in early 2025. More alarming, Tesla's registration numbers in key international markets like Germany, France, and China reported drops of 76.3%, 26%, and 49% respectively. These declines correlate with Musk's political maneuvers—most notably his interference in the German elections, where he supported far-right candidates.
Public sentiment towards Tesla is changing as well. Protests against Musk's political affiliations have surged globally, manifesting outside Tesla dealerships and manufacturing sites. Consumer interest has waned; surveys indicate that the number of potential buyers considering a Tesla has decreased from 22% in 2022 to just 7% as of 2025. Additionally, social media has seen a rise in users sharing images of Tesla vehicles adorned with messages commenting on Musk’s erratic political behavior.
While competition from Chinese manufacturers and traditional car companies investing in electric vehicles cannot be overlooked, Musk's alignment with far-right politics poses a branding challenge for Tesla. A high-end manufacturer, Tesla's identity as a purveyor of innovative and sustainable solutions seems at odds with Musk's associations with those actively denying climate change and opposing key pillars of the company's mission.
Tesla engineer Thomas Temme articulated this disconnect clearly, stating, "Musk's support for political figures who disregard the need for sustainable energy poses a stark contradiction to the values we strive for at Tesla."
In conclusion, as Tesla navigates these tumultuous waters, the interplay between Musk's political stance and the brand's image could have lasting implications on its market position and consumer perception. The company’s ability to revive sales and sustain its reputation as a leader in the electric vehicle sector will hinge not only on its innovative capabilities but also on the public’s response to Musk's ongoing political endeavors.
Related Sources: