Few auto executives are as intently recognized with the businesses they handle as Elon Musk, the chief govt of Tesla, is. And doubtless none are extra prolific in broadcasting their political beliefs on social media.
However as Mr. Musk’s public persona has change into more and more proper wing, Tesla seems to be paying a value in gross sales, particularly to liberal and left-leaning prospects who’re more likely to purchase battery-powered vehicles than conservatives are, in line with analysts and plenty of automobile homeowners who responded to a questionnaire on The New York Occasions’s web site about whether or not his conduct affected their views of Tesla.
His picture as an erratic, impulsive supervisor seem to have rubbed off on the vehicles, elevating doubts in some individuals’s minds about their high quality and serving to to elucidate why Tesla gross sales have been falling. On Tuesday, the corporate reported that its world gross sales within the second quarter fell 4.8 p.c from the identical interval a yr earlier, after an 8.5 p.c drop within the first three months of the yr.
“Musk is a real lightning rod,” stated Ben Rose, the president of Battle Street Analysis, which has a usually constructive view on Tesla’s inventory. “There are individuals who swear by him and individuals who swear at him. No query, a few of his feedback are an actual turnoff for some individuals. For a subset, sufficient to purchase one other model.”
Tesla and a consultant for the corporate’s board didn’t reply to requests for remark.
A few of the greater than 7,500 individuals who responded to The Occasions’s questionnaire stated they have been offended by what they perceived as antisemitism from Mr. Musk, which he denies. Some have been upset by the way in which Mr. Musk has managed Twitter, now known as X, since he purchased the corporate in 2022. He fired 1000’s of staff and eliminated guardrails on content material shared on the social media platform. His more and more pleasant relations with former President Donald J. Trump and different conservative personalities have been additionally cited as considerations. A overwhelming majority of the readers who responded to the questionnaire have been essential of Mr. Musk.
“You’re principally driving round an enormous crimson MAGA hat,” stated Aaron Shepherd, a product designer at Microsoft in Seattle who stated he was planning to purchase an electrical Volkswagen ID.4 as a substitute of a Tesla.
It isn’t potential to know what value Tesla has paid for Mr. Musk’s political statements and actions. What is evident is that Tesla, as soon as the dominant vendor of electrical automobiles worldwide, has misplaced market share in lots of international locations for quite a lot of causes. Chief amongst them is the corporate’s reliance on the Mannequin Y sport utility automobile and the Mannequin 3 sedan, which haven’t been considerably up to date in years, for nearly all of its gross sales. Different corporations are luring patrons by introducing new or up to date vehicles extra regularly.
In China, home carmakers like BYD have gained floor on Tesla by providing extra reasonably priced vehicles with expertise options that enchantment to Chinese language shoppers, like rotating screens. In Europe, BMW, Volkswagen and different native manufacturers are doing properly by providing extra luxurious or cheaper vehicles than Tesla. And in america, Hyundai-Kia, Ford Motor and Common Motors have elevated gross sales by providing a rising collection of fashions.
Occasions readers who responded to the web questionnaire stated they’d been turned off by Mr. Musk’s statements and by their expertise with Tesla’s vehicles and repair operations — the corporate sells and companies vehicles instantly, relatively than by sellers.
“There’s a time after I’d have given Musk an organ if he wanted one,” stated Tim Yocum, an engineering director at a software program firm. However Mr. Yocum, who lives in Chicago, stated that he had skilled issues along with his Tesla Mannequin S and that he had been unhappy with the corporate’s restore and upkeep companies. Mr. Musk’s veer to the suitable has additionally upset him.
“Tesla is the one producer in up to date instances that has unapologetically let its C.E.O. take a tiki torch to its good identify,” Mr. Yocum stated. “This automobile would be the final Tesla I personal.”
Such feedback assist illuminate surveys that say Tesla’s status has suffered not too long ago. The corporate slipped to 63rd place within the 2024 Axios Harris Ballot 100, which requested respondents about their views on company manufacturers. In 2021, the corporate was in eighth place.
Mr. Musk has maintained that his public statements and persona don’t have an effect on Tesla’s gross sales. “We make the very best vehicles,” he stated at The Occasions’s DealBook Summit in November. “Whether or not you hate me, like me or are detached, would you like the very best automobile or not the very best automobile?”
Mr. Musk nonetheless has loads of passionate admirers. And a few stated the chief’s public statements wouldn’t affect their determination to purchase a Tesla. Many individuals gave him credit score for pushing the auto business to provide electrical automobiles, a robust instrument to fight local weather change.
“He has led an organization that has efficiently disrupted a corrupt, lazy automobile business,” stated Julian Mehnle, a software program engineer who lives in San Francisco. Whereas no fan of Mr. Musk, Mr. Mehnle stated, “I’m grownup sufficient to separate these considerations from my selection of client merchandise.”
Robert Dean, an architect who lives in Redding, Conn., echoed these sentiments: “Musk is a huge, disruptive expertise with a transformative and constructive impact on the world we dwell in. He is also an oddball character, however I’m not marrying him; I’m shopping for vehicles from an organization he brilliantly leads.”
Most of Tesla’s shareholders stay largely supportive of Mr. Musk. Final month, buyers endorsed a $45 billion compensation plan for him by a large margin.
But automobile patrons whom The Occasions heard from and analysts stated Mr. Musk’s political exercise had clearly harm the corporate’s status with left-leaning shoppers. And there may be little proof that Mr. Musk’s flip to the suitable has attracted extra conservatives to purchase Teslas. In reality, 77 p.c of Republicans and Republican-leaning voters stated this yr that they weren’t thinking about battery-powered vehicles, up from 70 p.c who stated the identical final yr, in line with the Pew Analysis Middle.
“He is perhaps successful some individuals who like his positions,” stated Greg Silverman, the worldwide director of brand name economics at Interbrand, a consulting agency that advises shoppers on advertising methods. However, he added, the percentages that Mr. Musk is attracting extra prospects relatively than pushing them away “are very low.”
Interbrand analysis signifies {that a} chief govt or different firm consultant who offends prospects can cut back gross sales as a lot as 10 p.c, Mr. Silverman stated.
Some automobile homeowners’ considerations went past Mr. Musk’s political statements. They cited accusations of racial discrimination at Tesla factories, or the notion that he has allowed racist content material to flourish on X. Tesla has denied that it tolerates discrimination at its factories.
“My mom was severely debating shopping for a Tesla,” stated Achidi Ndifang, who works in data expertise in Baltimore. “As a Black individual, I felt like it could be an insult for my mom to drive a Tesla.”
Derek Morf, a highschool math trainer in Verona, N.J., who owns a Tesla, reported feeling alarmed when Tesla eliminated the Disney Plus app from some dashboard screens late final yr, apparently as a result of Mr. Musk was indignant at Robert A. Iger, the chief govt of Disney.
Mr. Morf didn’t care that a lot concerning the Disney app, which he hardly used. However, he stated, he discovered it unsettling “that the automobile I bought might have options modified instantly just because one man had that a lot management.”
Such considerations might be a legal responsibility for Tesla because it pours assets into autonomous driving expertise. Mr. Musk has promised to unveil a self-driving taxi on Aug. 8. The expertise can not succeed with out belief from shoppers.
Many Occasions readers identified that different automobile corporations additionally had baggage. Volkswagen had an emissions scandal a couple of years in the past. Henry Ford, the founding father of Ford Motor, held and unfold antisemitic views. A decade in the past, G.M. offered vehicles with defective ignition switches that have been blamed for greater than 100 deaths.
Established automobile corporations nonetheless promote gasoline vehicles that emit greenhouse gases and different pollution. Tesla sells solely electrical vehicles.
However most likely no different present auto govt has as loud a megaphone as Mr. Musk has, or is extra prepared to make use of it.
“If individuals assume that the C.E.O.s of different corporations are saints, they’re a bit naïve for my part,” stated Jan Leys, a Tesla proprietor in Zurich. “They only don’t have as large a mouth and/or platform as Elon Musk.”
