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The Wall Street Publication > Blog > U.S > Are Elon Musk’s politics costing Tesla gross sales?
U.S

Are Elon Musk’s politics costing Tesla gross sales?

Editorial Board Published February 18, 2025
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Are Elon Musk’s politics costing Tesla gross sales?
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By Chris Isidore | CNN

What is thought is that Tesla had its first-ever drop in international gross sales final yr, as gross sales fell 1% from 2023. That wouldn’t be an enormous decline for a lot of different corporations, however it’s notable at an organization that had recorded 38% and 40% will increase in gross sales the earlier two years – and with the huge development in its share worth over the previous decade largely predicated on future development.

RELATED: Waves of anti-Tesla and Elon Musk protests ripple all through Bay Space

On a smaller time scale, Tesla did report a pointy drop 16% in US gross sales between December and January, however that’s typical for the corporate, which appears to make a serious push for year-end gross sales to hit its full-year monetary outcomes goal, adopted by a drop in January. Gross sales in January 2024, as an illustration, have been off 24% from its December 2023 gross sales.

However Tesla is dealing with much more than a CEO whose eyes haven’t solely been on the federal authorities, however not less than 4 different corporations he’s concerned in. And that makes it arduous accountable anyone component definitively for the corporate’s comparatively tough seas.

“It’s still too early to see any (Musk backlash) in the Tesla numbers,” mentioned Stephanie Valdez Streaty, director of business insights for Cox Automotive. “We can’t pinpoint that polarization is causing people to buy or avoid a Tesla.”

Musk has turn out to be the main focus of a lot consideration for his strikes to reshape the federal authorities as he co-hosts Oval Workplace press conferences with President Donald Trump. And the headwinds for Tesla gross sales are actual, from elevated competitors to the worth of its vehicles.

Maybe the largest signal of shift in curiosity in proudly owning a Telsa comes from S&P International Mobility, which has gross sales information on a state-by-state foundation. It broke the information into “blue states,” that means states that voted for the Democratic candidate within the final 4 presidential elections, and “red states” the place Republicans received 4 straight elections. And inside every group of states, it seemed on the share of family that already owned a Tesla that purchased one other one when buying a brand new automotive.

RELATED: Tesla gross sales decline in California with Mannequin 3 plunging 36%

Within the blue states, the share of repeat Tesla patrons fell, from 72% within the final quarter of 2023 to 65% within the final quarter of 2024. In the meantime, repeat Tesla patrons in crimson states edged up very barely from 47.6% on the finish of 2023 to 48.2% over the last three months of final yr.

The drop in loyalty price for Tesla house owners in blue states resulted in Tesla shedding about 1 share level of market share general in these states, which incorporates among the nation’s greatest automotive markets, similar to California.

There’s some further anecdotal proof to recommend that some patrons might have been turned off by Musk’s political activism. Valdez Streaty factors to polling of potential automotive patrons this month by Morning Seek the advice of that reveals that just about 32% of US patrons “would not consider” shopping for a Tesla. That’s up from 27% in a Morning Seek the advice of survey a yr in the past, and solely 17% when it requested the query in in February 2021.

By comparability, solely 16% of potential patrons have been nearly sure or very possible to take a look at a Tesla earlier than shopping for in the latest survey, a determine that hasn’t modified a lot during the last 4 years.

The rise in individuals who say they’re crossing Tesla off their purchasing record will not be almost as nice as these now expressing a unfavourable view of Musk. A January ballot by Quinnipiac College discovered that 53% of voters disapprove of Musk enjoying a outstanding position within the Trump administration, in comparison with 39% who accepted. A ballot in December 2022 by the college discovered 36% of voters had a optimistic opinion of Musk and 35% had a unfavourable view.

Extra used Teslas on the market

One issue that might point out a Tesla-based Musk backlash could be the variety of used Teslas hitting the market, as house owners dump their vehicles. And there are extra Teslas being traded in at the moment, with a median of round 11,300 Teslas listed on Cox’s AutoTrader, a document, all through the fourth quarter of final yr, up 28% from the common of 8,800 a yr earlier.

However even that has complicating components – Cox mentioned a lot of the flood of Teslas hitting used automotive heaps is probably going as a result of post-pandemic surge in gross sales three years in the past and the pure development of some individuals buying and selling in vehicles after three years.

And there are a lot of different components possible driving down new Tesla gross sales, most notably elevated competitors. Legacy Western automakers similar to Normal Motors, Ford and Volkswagen have spent the previous few years rolling out new fashions of electrical autos, with extra always on the best way and generally with decrease costs than Tesla.

By comparability, Tesla has made comparatively modest modifications to its primary lineup – the Mannequin Y and Mannequin 3 sedans and Mannequin X and Mannequin Y SUVs. The one new mannequin, the Cybertruck pickup, is an costly area of interest automobile that has had solely modest gross sales.

There may be additionally important new competitors from Chinese language automaker BYD, which has almost caught Tesla in worldwide EV gross sales and really topped it by a big margin within the fourth quarter of 2024. BYD is taking market share away from Tesla in China and Europe but it surely has but to enter the US market.

Tesla gross sales in Germany in January fell 59% in comparison with a yr in the past, in line with the German Federal Motor Transport Authority. And simply as Musk has been a key supporter of Trump, he has turn out to be a excessive profile supporter of the far-right Various for Germany (AfD) celebration.

Automotive purchases are among the many largest and most fastidiously thought out purchases that customers make aside from housing. And so they typically look primarily at worth, choices and perceived worth greater than components such because the politics of the CEO, mentioned Ivan Drury, director of insights at car-buying website Edmunds.

“There’s a huge swath of the populaton that doesn’t care about politics or it’s not top of mind,” mentioned Drury. “A lot of people will put aside their feelings about politics when making a purchase like this and focus on price.”

TAGGED:costingElonMusksPoliticssalesTesla
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