Is Elon Musk’s politics threatening Tesla and his empire? – DW – 03/13/2025 | EUROtoday

It was maybe the clearest signal but that Tesla CEO Elon Musk’s political maneuvering has backfired. On Tuesday, US President Donald Trump stood alongside the tech billionaire and a pink Tesla Model S outdoors the White House, declaring he was shopping for the electrical automotive for his workers to make use of and paying full value.

Trump’s unprecedented endorsement of the electrical car (EV) big comes after months of mounting criticism over Musk’s deepening involvement in each US and international politics — together with assist for far-right events in Europe — and after billions of {dollars} have been wiped off Tesla’s shares.

That Musk sought the president’s public backing means that protests, client boycotts and even sabotage assaults on Tesla autos, charging stations and manufacturing vegetation have unsettled the world’s wealthiest man and spooked Tesla buyers. Trump condemned these incidents as instances of “domestic terrorism.”

Could politics be blamed for falling Tesla gross sales?

Tesla’s plunging gross sales have added to the strain. In Germany, the place Musk used his social media platform X to endorse the far-right Alternative for Germany (AfD) occasion forward of final month’s nationwide elections, Tesla registrations fell 76% in February in comparison with the earlier yr. EV registrations total in Germany surged by almost a 3rd over the identical interval.

An analogous development is rising elsewhere, together with France the place Tesla gross sales fell by 45% within the first two months of the yr, whereas Australia noticed gross sales fall by greater than a 3rd within the 4 months since Trump’s reelection.

In California, the largest US marketplace for EVs, Tesla gross sales fell for the fifth consecutive quarter, based on the California New Car Dealers Association (CNCDA). In 2024, Tesla registrations within the Golden State dropped by 11.6%.

Consumers look like steering away from Musk’s EV model amid accusations of political interference and a too-cozy relationship with Trump. Many Tesla house owners have put stickers on their EVs in opposition to Musk’s shift to the correct, with slogans that learn: “Vintage Tesla — Pre-Madness Edition” and “I Bought This Car Before Elon Lost His Mind.”

“Musk thinks he can say anything he wants to and doesn’t think Tesla will suffer any consequences,” Morningstar analyst Seth Goldstein advised the Associated Press final week. “Tesla was in the sweet spot. Now it has competition.”

A latest Strategic Vision survey requested Americans to call their favourite car and whereas each Republican and Democrat voters selected an EV over combustion-engine fashions, neither picked Tesla.

Daniel A. Crane, a legislation professor on the University of Michigan and the creator of an upcoming guide about Tesla, famous how, till just lately, the carmaker was “heavily identified with environmentalist concerns,” noting how Tesla drivers “skewed left politically.”

“In the last two years, Musk has pretty much burned his bridges with those constituencies. Also, given the arrival on the market of many other EVs [startups like Rivian and Lucid and legacy automakers]people who want to drive an EV for climate reasons no longer have to buy a Tesla,” Crane advised DW.

Crane mentioned whereas Musk might imagine Tesla can as an alternative goal Trump supporters on the correct, “MAGA folks tend to be the most EV-skeptical.”

Days numbered for ‘Teflon Elon’ monicker

The intense rivalry between EV makers has sparked a significant selloff in Tesla inventory. Over the previous three months, shares in Musk’s carmaker have fallen by nearly half. Musk’s web value has dropped by $144 billion (€132 billion) over the identical interval amid rising skepticism of Tesla’s promise to ship autonomous driving harnessing synthetic intelligence (AI).

The firm’s valuation peaked at greater than $1.5 trillion after the US presidential election however on Monday alone, Tesla inventory dropped 15%, in a market selloff prompted by fears of a looming US recession.

Musk backed Trump’s marketing campaign to the tune of $250 million and has since turn out to be his high advisor on slashing authorities waste by means of the Department of Government Efficiency (DOGE).

His involvement has spurred every day stories of slashed public-sector spending, welcomed by many US voters however criticized by activists, teachers and lawmakers as missing correct oversight.

Growing outrage over Musk’s position in DOGE

Tesla Takedown protests have erupted at dealerships throughout the US just lately over Musk’s position in DOGE, which has to this point canceled round $60 billion of contracts that fund humanitarian applications world wide.

Americans are witnessing “an extraordinary centralization of power in someone who lacks a top-level security clearance and has not been subject to any Senate confirmation process,” Don Moynihan, a professor on the Ford School of Public Policy on the University of Michigan, advised Reuters information company final month.

Moynihan mentioned Musk’s entry to delicate authorities information with out satisfactory monitoring was “concerning” and “unprecedented.”

Musk’s different holdings nonetheless rising

As nicely as Tesla, Musk owns Space X, the first personal area firm. His different ventures embody Neuralink, which is creating an interface implanted within the mind, xAI, which created the AI chatbot Grok and the social media platform X. The infrastructure, tunnel building and gear agency named The Boring Company can be owned by Musk. He additionally has ambitions to colonize Mars.

Unlike Tesla, these companies should not publicly listed however can nonetheless be traded by buyers on the secondary market. Bloomberg reported Wednesday that whereas Tesla’s worth has plummeted, the collective valuation of 4 of Musk’s personal companies is up 45% for the reason that election, citing evaluation from buying and selling platform Caplight. xAI’s share value has elevated 110% since November 5.

Between them, Musk’s companies have contracts value between $18 billion and $22 billion with the federal authorities, based on US media stories, though these figures could not paint the total image as most of the offers are categorized.

Those contracts and the actual fact Musk’s companies have been investigated or fined greater than 30 instances by 11 US authorities businesses, based on the New York Timeshave raised alarm bells about doable conflicts of curiosity together with his involvement with DOGE.

Even earlier than he grew to become a detailed advisor to Trump, buyers had additionally questioned whether or not Musk had unfold himself too skinny.

Is Musk’s time up at Tesla’s helm?

Last month, Brad Lander, the New York City comptroller, who oversees worker pension funds that personal Tesla shares value $1.25 billion, advised the New York Times that Musk ought to step down as Tesla CEO however stay on the board. This, he mentioned, would return the EV maker to the “basic model of shareholder governance in America.”

While Musk has mentioned publicly that his involvement with DOGE is more likely to final one other yr, certainly one of Telsa’s most bullish buyers of Wall Street, Dan Ives, now thinks he ought to give up his dedication to the Trump administration.

“The clock has struck midnight for Musk and DOGE…he needs to also wear his hat as Tesla CEO,” Ives, who’s world head of expertise analysis at Wedbush Securities, Told DW. “Balance will be key and that’s what Musk needs to do to stop the bleeding in Tesla stock.”

A ballot by US funding financial institution Morgan Stanley revealed Wednesday discovered that 85% of buyers thought Musk’s transfer into politics has both had a “negative” or “extremely negative” impression on Tesla’s enterprise.

Musk himself has admitted having a tricky time juggling his many commitments, telling Fox Business on Monday that he was operating his companies “with great difficulty.”

Despite this, he appeared to double down in his assist for Trump’s presidency. The New York Times reported Wednesday that Musk is planning an additional monetary increase to Trump’s political operation value $100 million, citing a number of individuals aware of the plan.

The newspaper mentioned the donation was an “unheard-of” transfer by a White House staffer.

While pictured alongside Trump, Musk advised reporters on Tuesday he would keep in Washington so long as he was helpful, however mentioned he would stay as Tesla’s CEO.

Edited by: Uwe Hessler