Tesla sales are slowing down, and the reason why might surprise you.
Musk’s Mischief
Elon Musk is no stranger to making headlines – whether it’s for his work at Tesla or his controversial tweets. But rumor has it that his outspoken political views might be driving some customers away from Tesla.
Left-Leaning Letdown
According to recent survey results, Musk’s political views are alienating liberal and left-leaning customers – two groups that have, historically, favored electric vehicles.
Sales Slump
Tesla’s sales numbers are starting to reflect this potential backlash. The company recently reported a 4.8% drop in global sales for the second quarter compared to last year, following an 8.5% decline in the first quarter.
The Musk Effect
As Ben Rose, president of Battle Road Research, explains, “Musk is a true lightning rod. There are people who swear by him and people who swear at him. No question, some of his comments are a real turnoff for some people. For a subset, enough to buy another brand.”
New York Times Asks
In a New York Times survey, the paper asked the public the question, “Has Elon Musk’s Behavior Affected How You View Tesla?” Almost 8000 readers responded, and many weren’t happy.
Musk’s Social Media Misadventures
A lot of grief was directed at Musk’s handling of Twitter (now X) after Musk axed thousands of employees and effectively said, “Anything goes” when it comes to content. People also reported that his growing friendliness with Trump and other conservative figures had rubbed them the wrong way.
Market Share Meltdown
While it’s difficult to work out how much Musk’s politics are impacting Tesla’s sales, it’s clear that the company’s market share is slipping worldwide – be that for whatever reason. Tesla, once the king of electric vehicles, is readily losing ground to competitors.
Global Competition Heats Up
Chinese brands like BYD are appealing to customers with cheaper, tech-savvy options. European automakers such as BMW and Volkswagen are drawing in buyers with both high-end and budget-friendly choice EVs. In America, Hyundai-Kia, Ford, and GM are boosting their EV sales by offering a wider variety of models.
Old Models, New Problems
Experts claim that Tesla’s reliance on the older Model Y and Model 3 is becoming a liability, as other carmakers frequently update and release new models. This stale lineup is one reason given for the slipping sales figures.
Reputation Rollercoaster
But that’s not all that’s slipping – Tesla’s reputation is also taking a hit. The company dropped to 63rd place in the 2024 Axios Harris Poll 100 (which asked people their views on brands), down from eighth place in 2021.
Musk’s Mindset
Musk, for his part, is unfazed. In an interview with the New York Times, Musk said, “We make the best cars. Whether you hate me, like me, or are indifferent, do you want the best car or not the best car?”
Loyalty on the Line
While Musk still commands a loyal following, some customers have begun to question their support. Many shareholders, however, remain supportive, as seen in the recent approval of Musk’s $56 billion compensation plan.
A Double-Edged Sword
Data does suggest that while Musk is losing the leftwing crowd, he isn’t attracting many conservative buyers.
Political Pendulum
Earlier this year, a Pew Research Center study found that 77% of Republicans and Republican-leaning voters have no interest in electric cars, up from 70% last year.
The Cost of Controversy
Greg Silverman of Interbrand warned that offensive statements from a CEO can reduce sales by up to 10%.
App Anger
Tesla’s centralized control is another point of controversy with customers. When the company removed the Disney Plus app from its dashboard screens, reportedly due to Musk’s feud with Disney’s CEO, some Tesla owners were outraged.
Trust Test
As Tesla invests more and more into self-driving cars, customer trust will be critical. Musk’s behavior could be a liability as the company gets ready to unveil its self-driving taxi, although it’s clear that Musk’s loud and unfiltered presence is both a blessing and a curse for Tesla.
Too Loud for Tesla’s Good?
Other car companies may have faced their own scandals, but none have a CEO with a reach as big as Musk’s.
Innovation vs. Image
The question, in the end, is whether Tesla’s innovation can outpace Musk’s shadow. Only time will tell.
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