Elon Musk's aggressive actions impact Tesla's relationship with the US government.

Elon Musk’s Political Activities Put Tesla in Uncertainty

For many potential Tesla buyers, the brand has lost its progressive appeal due to Elon Musk’s political alignment with President Trump. The negative turn in public opinion is evident in Tesla’s disappointing first-quarter earnings, with profits dropping 71% and sales weakening. The company’s deliveries also saw a significant decline in the first quarter of 2025 compared to previous years.

Musk’s involvement in politics has led to Tesla becoming a symbolic pariah, with trade-ins hitting record highs and sales in Europe dropping. Critics and protesters are calling for boycotts, resulting in the automaker’s stock price plummeting. Even Tesla’s supporters are urging Musk to focus on business rather than politics to avoid darker times ahead for the company.

Tesla’s Future Outlook

Despite the challenges, Musk continues to promote Tesla as an AI company that will revolutionize autonomous vehicles and humanoid robots. The big question now is whether the Tesla brand can recover from the current negative perception in the market.

Drop in European Sales

Tesla’s new car sales have significantly declined in Europe, especially in countries like Germany where sales have dropped by over 40%. Sales of electric cars from other brands have risen while Tesla’s market share in Europe has decreased.

Succession Planning

Reports suggest that Tesla’s board is considering potential successors for Musk as he becomes more involved in politics. The need for succession planning arises from concerns about the continued devaluation of the Tesla brand associated with Musk’s actions.

Protests as a Risk Factor

Protests against Tesla, known as the “Tesla Takedown,” have become a global phenomenon aimed at discouraging people from buying Teslas and selling their Tesla stock. These protests have now become an official risk factor in Tesla’s regulatory filings, as they could harm the brand and business reputation.

Tariff Exposure

Tesla faces potential tariff exposure as a result of changing political dynamics and global trade policies. This could impact the company’s operations, sales, and ability to raise additional funds in the future.

Tesla remains vulnerable to Trump’s automotive tariffs in the U.S. due to Musk’s alliance with the president, as noted by Wedbush analyst Dan Ives in a recent report. Ives lowered Tesla’s price target to $315, emphasizing that Musk’s politics are causing a brand crisis for the company and impacting sales not only in the U.S. and Europe but also in China, where consumers are turning to domestic brands like BYD.

A MAGA hat on wheels

Studies show that Musk’s political stance has led to a loss of customers among Democrats but increased support from Republicans. His endorsement of Trump has influenced Republicans’ likelihood of purchasing a Tesla, rising from 7% to 10.2% after the endorsement.

“Hang on to your stock”

During a livestreamed Tesla presentation, Musk encouraged employees and investors to hold onto their stock despite challenging times. He highlighted the potential of the Cybercab, a two-seater robotaxi without traditional controls, and emphasized the company’s focus on innovation and production efficiency.

Molotov cocktails and vandalism

Tesla has faced attacks on showrooms, charging stations, and vehicles, with instances ranging from vandalism to violence. Musk and Trump have responded differently to these acts, with Trump labeling them as domestic terrorism and vowing harsh penalties.

Protesters have been showing up at Tesla dealerships and showrooms to try to discourage people from buying Tesla cars. They also aim to encourage Tesla owners to trade in their vehicles and Tesla stockholders to sell their shares.

Despite these protests being peaceful, we’re beginning to see the start of violent counterprotests — like the Florida man who drove his SUV into a crowd of protestors outside a Palm Beach Tesla dealership in March.

Associating with the Proud Boys

Thousands of people joined in Tesla Takedown protests the last weekend in March at showrooms across the country. The crowds drew small numbers of counterprotests in some regions that were peopled mainly by MAGA supporters, Wired reports. Among them were far-right extremists, including members of the Proud Boys and armed militias.

The “Roman” salute

While speaking at a rally celebrating Trump’s inauguration in January, Musk did what many have perceived to be not one, but two, Nazi salutes.

The damage has only been amplified by Musk’s vocal support for the far-right German political party AfD, as well as his history of sharing antisemitic posts.

Shortly after the salute incident, activists projected an image of Musk doing the salute, along with the word “Heil,” onto Tesla’s Berlin gigafactory.

BYD breakthroughs

One of Tesla’s biggest competitors, China’s BYD, has been touting significant breakthroughs in charging. The automaker said this week that its new cars can be charged in five minutes, which would give it a huge competitive edge over Tesla and indeed any other EV maker.

China is one of Tesla’s largest markets, but BYD is continuing to bully the automaker on its home turf. BYD recently unveiled its “God’s Eye” advanced driver-assistance system — akin to Tesla’s Autopilot and FSD — that will be installed at no additional cost on its entire EV lineup, including its ultra-cheap $9,600 Seagull hatchback.

BYD continues to impress consumers with its high-tech range of EVs and hybrids and has once again surpassed Tesla on revenue. In 2024, BYD reported $107 billion in revenue compared to Tesla’s $97.7 billion.