Elon Musk's Political Moves: A Blow to Tesla's Bottom Line?

As Elon Musk's political activities through the Department of Government Efficiency (DOGE) continue to draw criticism, protests against Tesla stores have been gaining momentum. These anti-DOGE protests, fueled by Musk's controversial actions and the backlash against President Donald Trump, have raised concerns about the impact on Tesla's sales and stock price. Let's delve into the correlation between Musk's political involvement and Tesla's market performance, and explore how the company's competitors are responding to the situation.

The Impact of Anti-DOGE Protests on Tesla's Sales and Stock Price

The anti-DOGE protests at Tesla stores have had an impact on the company's sales and stock price, with trends showing a decline in both metrics since the protests began. In 2024, Tesla's global sales dropped by 1.1% compared to the previous year, marking the company's first annual decline in 12 years. Additionally, Tesla's sales numbers in Europe are "downright atrocious" due to inventory shortages and factory changes for the Model Y, its most popular vehicle. In the U.S., Tesla's sales have also been affected, with a 16% decline in sales between December and January.

Tesla's stock price has also taken a hit, falling by nearly a third since Trump took office, although it's still higher than it was a year ago. In December 2024, Musk became the first person to have a net worth above $400 billion, but he has since lost $52 billion in net worth as shares of Tesla (TSLA) have plunged 27.6% in February. Tesla's value dropped below $1 trillion for the first time since last November, causing anti-Elon Musk protesters to celebrate on Bluesky.



The Correlation Between Elon Musk's Political Activities and Tesla's Market Performance

There appears to be a correlation between Elon Musk's political activities and Tesla's market performance. Musk's involvement in DOGE, such as disrupting crucial government programs and accessing sensitive taxpayer data, has drawn legal scrutiny and public backlash. The protests and vandalism incidents targeting Tesla stores could be influencing the company's sales and stock price. Additionally, some Tesla owners and potential buyers are separating the company from Musk, while others are horrified by his actions and will not buy a Tesla because of him. This shift in consumer sentiment could further impact Tesla's sales and market performance.

Tesla's Competitors: Capitalizing on the Situation

Tesla's competitors have been closely monitoring the protests and Musk's political involvement, and some have employed strategies to capitalize on the situation. General Motors (GM) has been actively promoting its electric vehicle (EV) offerings, such as the Chevrolet Bolt and the upcoming Hummer EV, as an alternative to Tesla. Ford has also been emphasizing its EV lineup, including the Mustang Mach-E and the upcoming F-150 Lightning. Other automakers like Volkswagen, Audi, and BMW have been investing heavily in their own EV offerings, such as the Volkswagen ID.4, Audi e-tron, and BMW iX. These companies have not directly addressed the protests or Musk's political activities, but they have been focusing on their own products and sustainability initiatives to attract customers who may be disillusioned with Tesla.

In conclusion, the anti-DOGE protests at Tesla stores have had an impact on the company's sales and stock price, with trends showing a decline in both metrics since the protests began. There appears to be a correlation between Elon Musk's political activities and Tesla's market performance, as evidenced by the stock price decline, sales decline, protests, vandalism, and shifting consumer sentiment. Tesla's competitors have been capitalizing on the situation by promoting their own electric vehicle offerings and emphasizing their commitment to sustainability and innovation without the controversies associated with Tesla and Musk's political involvement. As the situation evolves, investors should keep a close eye on Tesla's market performance and the strategies employed by its competitors to capitalize on the situation.