As Elon Musk takes a leading role with DOGE, some Tesla customers are rethinking their allegiance

Elon Musk has long been Tesla’s public face, convincing consumers to pay premium prices for electric vehicles that promised to help combat climate change. But as Musk has navigated toward conservative politics and emerged as a close adviser to President Trump, some Tesla owners say they are reconsidering their loyalty to the brand.

Wall Street analysts worry the Tesla brand is showing some cracks, with sales falling 1% in 2024 from the prior year — the automaker’s first annual sales decline in 12 years, even as global EV sales rose 7.3%. They also say Musk’s political activities risk alienating consumers, while protests have erupted at a number of Tesla dealerships across the U.S. over his proximity to the Trump administration.

“It would seem that potential consumers for Tesla EVs might be turning away from the company because they don’t appreciate Elon Musk’s close relationship to President Trump and the administration’s tariff policies,” Mike O’Rourke, chief market strategist at Jonestrading, told CBS MoneyWatch.

Since Mr. Trump’s Jan. 20 inauguration, the carmaker’s stock has dropped 17% due to the “visible perceived downside impact” of Musk’s involvement with the White House, Wedbush Securities analyst Dan Ives wrote in a Feb. 19 research note.

The inextricable link between Musk, the world’s richest person, and Tesla’s brand illustrates both the opportunities and risks of tying a company’s fortunes to the personality of a single executive. Musk has led Tesla from its days as a scrappy startup to the world’s biggest producer of EVs, growing its valuation to more than $1.2 trillion, making it one of the world’s most valuable businesses.

But Musk’s recent inflammatory public statements and his role leading Mr. Trump’s cost-cutting task force, the Department of Government Efficiency, or DOGE, appear to be turning off some Americans. Consumers’ political leanings can play into their decision to buy an electric vehicle, with Democrats three times more likely to buy an EV than Republicans, according to a 2024 Pew Research Center poll.

Tesla did not respond to a request for comment about the impact of Musk’s political activities on the automaker.

Customer dissatisfaction

Among the one-time Tesla fans who have had second thoughts is Minah Oh, 40, of Massachusetts, who told CBS MoneyWatch that Musk’s political activities led her to sell her Tesla Model X, which she had owned since 2015, in October. 

“I got it because it was great for the environment, and at the time he was more on the liberal side of politics,” Oh told CBS MoneyWatch about Musk. But, she added, she felt that Musk by last fall had become “volatile and turned radically right.”

Oh also said she was concerned that driving a Tesla could signal to others that she’s aligned with Musk’s political opinions.

“I wouldn’t want people to think I was a Trumper or that I am associated with Elon, because he is so tied to the brand,” Oh said. “I am so happy I sold it, because if I was driving it today, in the current climate I would be so embarrassed.”

Jake Nickell is another former Tesla owner who has distanced himself from the car company because of Musk’s evolving reputation. An early EV fan, the Chicago-based entrepreneur bought the first of three Tesla vehicles he eventually purchased, a Roadster sportscar, in 2006.

“It was super fun to see an electric car company come up and be viable,” he told CBS MoneyWatch. He sold the car for a profit when it was no longer practical for his growing family, replacing it with a Tesla Model S and later a Model X. 

But Nickell said he sold the Model X in 2021 because he was unhappy with the vehicle and because of Musk’s changing public persona. He replaced it with a car from rival EV maker Rivian.

“We were not happy with how [Musk] was acting on many levels. It was a slow slide. He started getting into the ‘bro’ startup culture of cryptocurrency at time, and there were signs that he was sliding into right-wing politics. We didn’t want anything to do with that anymore,” Nickell said of why he sold his family’s Model X. 

Asked if he’d ever buy a Tesla again, Nickell responded, “Absolutely not.” He’s now helping his son buy a car and is considering a Toyota Prius or an EV from Volkswagen.

Musician Sheryl Crow is another former Tesla owner who recently distanced herself from the brand, writing in an Instagram post that she sold her vehicle because of Musk’s recent political activities.

“There comes a time when you have to decide who you are willing to align with. So long Tesla,” she wrote, adding that she was donating the proceeds of the sale to NPR because the Trump administration wants to cut its federal funding.

Wall Street analysts have voiced concern about the impact of Musk’s reputation on the company’s sales. That includes in Europe, where Tesla sales in Germany, a key market, fell roughly 60% last month, according to Reuters. 

“Musk’s DOGE related actions and more powerful alliance with Trump clearly could alienate some consumers to move away from the Tesla brand,” Ives, who remains bullish on the company’s prospects, said in his Feb. 19 report. “There is some momentum around this effort in Europe and pockets of the U.S. as well since November.”

Tesla’s “net favorability rating,” which measures consumers’ perception of the brand based on survey responses, is at all-time lows, according to Stephen Gengaro, an analyst for investment advisory firm Stifel, who believes that Musk could be hurting the brand’s score. Researchers asked consumers if they had a “favorable” or “unfavorable” impression of Tesla, ranging from “very favorable” to “very unfavorable,” to determine the rating. Respondents could also reply that they’d never heard of the brand, or that they had no opinion. 

Tesla’s favorability rating sank to 3%, a six percentage point decline, for the week ended Jan. 28, compared with 9% in January 2024, according to data from Stifel Think Tank Group, the firm’s research and analysis arm. In January 2018, the company’s favorability rating stood at 33%. 

“[M]any on the Street view Musk spending ‘100% of his time’ with DOGE as creating a negative perception around his Tesla focus,” Gengaro wrote in a research note.  

Partisan divide

More than half of Americans held a negative view of Musk, according to a Pew Research Center survey conducted between Jan. 27 and Feb. 2. Views were starkly divided based on political party, with about 7 in 10 Republicans saying they had a favorable view of him, while more than 8 in 10 Democrats said they viewed him unfavorably. 

Those changing perceptions may be rubbing off on car buyers, with a February Morning Consult poll finding that about 32% of U.S. buyers “would not consider” buying a Tesla, a five percentage point increase compared with a year earlier, according to a recent CNN report. 

In states that voted Democratic in the last four presidential elections, the share of repeat Tesla buyers dropped seven percentage points over the past year, falling from 72% at the end of 2023 to 65% by the fourth quarter of 2024, according to additional data provided to CNN by S&P Global Mobility. Repeat buyers in states that voted Republican barely inched higher, rising from 47.6% to 48.2% over the same period.

In California, the country’s largest market for electric vehicles, total driver registrations for Tesla’s cars fell 11.6% percent in 2024, according to data from Experian automotive. Registrations for all other brands increased 1.4%, California New Car Dealers Association NCDA wrote in a January report. 

Could Musk’s ties to Trump actually help Tesla?

At the same time, some on Wall Street say there are potential upsides to Musk’s alliance with Mr. Trump. Perhaps most important, the Trump administration may seek to weaken or eliminate federal rules governing Tesla’s self-driving vehicle technology, a major initiative for Tesla. 

Musk has long had ambitions to launch full self-driving vehicles powered by AI. The company plans to launch autonomous ride hailing in Austin in June, Musk confirmed. Yet such efforts have been slowed by federal investigations into vehicle crashes involving Tesla’s “Full Self-Driving” system and by existing safety regulations. 

“Trump’s election, and the bromance between Trump and Musk, will essentially lead to the defanging of a regulatory environment that’s been stifling Tesla,” Ives told the Associated Press. 

If the Trump administration eases regulations for self-driving cars, it would be “a significant tailwind for Tesla’s autonomous and AI vision heading into 2025,” he added.

Meanwhile, the dip in consumer perceptions of Tesla’s brand could simply be a short-term headwind, Gengaro said. And long-term, the company’s development of robotaxis and self-driving vehicles could provide much more of Tesla’s growth than vehicle sales to consumers, he added. 

Tesla’s sales struggles also could be based on other issues besides Musk, including mounting competition for EVs from other automakers. And Tesla’s sales decline in Germany could be due to a preference among consumers there for electric cars made by homegrown automakers such as BMW, Mercedes-Benz and Volkswagen.

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• Tesla
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