KOMPUTER JADUL-, Could this be the most concrete sign yet that Tesla CEO Elon Musk’s political maneuvering has backfired on his business?
On Tuesday (March 11) outside the White House, President Donald Trump stood next to the tech billionaire and a red Tesla Model S. Trump announced that he would buy the electric car for his entire staff to use, with full payment.
Trump’s unexpected support for the electric vehicle (EV) giant comes after months of criticism of Musk’s involvement in US and foreign politics, including support for far-right parties in Europe, after billions of dollars were wiped off Tesla’s stock.
The fact that Musk sought public support through the US president has drawn protests, consumer boycotts and even sabotage attacks on Tesla, its charging stations and a production plant has worried his investors.Trump has condemned the attacks on Tesla as “domestic terrorism”.
Have Tesla’s sales plummeted because of Musk’s political involvement?
Tesla’s sales slump is adding to the pressure. In Germany, where Musk used his social media platform X to support the far-right AfD party in last month’s parliamentary elections, Tesla sales fell 76% year-on-year. Overall EV sales in Germany, meanwhile, rose by almost a third in the same period.
A similar trend is emerging in France, where Tesla sales fell 45% in the first two months of the year. In Australia, Tesla sales have fallen by more than a third in the four months since Trump was re-elected.
In the largest US electric vehicle market, California, Tesla sales fell for the fifth straight quarter, according to the California New Car Dealers Association CNCDA. Tesla sales in the state are also down 11.6% in 2024.
Consumers appear to be shunning Musk’s electric cars, amid allegations of Musk’s political involvement and his close ties to Trump. Many Tesla owners are putting stickers on their cars in protest of Musk’s turnaround, with slogans such as: “Vintage Tesla – Pre-Madness Edition” or “I bought this car before Elon lost his mind.”
"Musk thinks he can say whatever he wants without consequences for Tesla," Morningstar analyst Seth Goldstein told the Associated Press last week. "Tesla used to be in a great position. Now, Tesla has a lot of competition".
A recent survey by Strategic Vision asked Americans to name their favorite vehicles. While many Americans chose EVs over conventional models, not a single one chose Tesla.
Daniel A. Crane, a law professor at the University of Michigan and author of a book about Tesla, noted that the automaker is "very much associated with its environmental concerns," and that Tesla drivers "tend to lean to the left politically".
"In the last two years, Musk has burned bridges with those groups. Plus, with so many other EVs on the market (like Rivian and Lucid, and other major automakers), people who want an EV for environmental reasons don't have to buy a Tesla", Crane told DW.
Crane added that while Musk may think Tesla can target Trump supporters on the right, "MAGA people tend to be the most skeptical of EVs".
The end of the “Teflon Elon” moniker?
The intense competition between electric vehicle manufacturers has triggered a major decline in Tesla shares. In the past three months, Musk’s Tesla shares have fallen by almost half.
Musk’s net worth has also fallen by $144 billion (around Rp2.36 trillion) in the same period amid growing skepticism about Tesla’s determination to deliver autonomous cars based on artificial intelligence.
The company’s valuation peaked at more than $1.5 trillion (around Rp24.5 quadrillion) after last year’s US presidential election, but on Monday (10/3) earlier this week, Tesla shares plunged 15% due to a market sell-off triggered by fears of a US recession.
Musk gave $250 million (around Rp4.1 trillion) in funding to Trump’s campaign and has since become Trump’s top adviser on cutting government spending through the DOGE Department of Government Efficiency.
Musk’s involvement has fueled daily reports of public sector budget cuts, which have been welcomed by many U.S. voters but criticized by activists, academics and lawmakers for lacking adequate oversight.
Controversy over Musk’s role in DOGE
Recently, “Tesla Takedown” protests have emerged at Tesla dealerships across the U.S. to protest Musk’s role in DOGE, which has so far canceled $60 billion worth of contracts that fund humanitarian programs around the world.
Americans are witnessing “an extraordinary concentration of power in someone who doesn’t have a high-level security clearance and hasn’t gone through the Senate confirmation process”, Don Moynihan, a professor at the University of Michigan’s Ford School of Public Policy, told Reuters last month.
Moynihan called Musk’s access to sensitive government data without adequate oversight “alarming” and “unprecedented”.
Meanwhile, Musk’s other businesses are still thriving. There’s SpaceX, Musk’s first private spaceflight company. In addition, there is Neuralink, which is developing an interface implanted in the brain. Then, there is xAI which created the AI chatbot Grok, and the social media platform X. The infrastructure and tunnel construction company The Boring Company is also owned by Musk. He also has an ambition to colonize the planet Mars.
Unlike Tesla, these companies are not listed on the stock exchange but can still be traded by investors on the secondary market. Bloomberg reported on Wednesday (12/03), although Tesla's valuation has fallen, the combined value of Musk's four private companies has actually increased 45% since the election, according to analysis from the Caplight trading platform. xAI's share price has even increased 110% since November 5, 2024.
Will Musk step down from Tesla???
Last month, Brad Lander, the New York City Comptroller, who manages an employee pension fund with Tesla stock ownership worth $ 1.25 billion (around Rp. 20.5 trillion), said Musk should step down as Tesla CEO but remain on the board of directors. According to him, this move would return Tesla to "the basic model of shareholder governance in the US".
Although Musk has publicly said his involvement with DOGE will likely last another year, one of the most bullish investors, Dan Ives, now thinks Musk should abandon his commitment to the Trump administration.
"The time for Musk and DOGE is over ... he needs to refocus as CEO of Tesla", Ives told DW. "Balance is key, and that's what Musk needs to do to stop the Tesla stock from plummeting".
A poll by US investment bank Morgan Stanley found that 85 percent of investors believe Musk's move into politics will have a "negative" or "very negative" impact on Tesla's business.
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