Are 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 crimson Tesla Model S outdoors the White House, declaring he was shopping for the electrical automotive for his employees to make use of and paying full worth.

Trump’s unprecedented endorsement of the electrical car (EV) large comes after months of mounting criticism over Musk’s deepening involvement in each US and international politics — together with help 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 automobiles, charging stations and manufacturing crops have unsettled the world’s wealthiest man and spooked Tesla buyers. Trump condemned these incidents as circumstances of “domestic terrorism.”

Could politics be blamed for falling Tesla gross sales?

Tesla’s plunging gross sales have added to the stress. In Germany, the place Musk used his social media platform X to endorse the far-right Alternative for Germany (AfD) social gathering 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 identical pattern 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, in accordance with 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 appropriate, 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 current 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 e book 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 stated whereas Musk might imagine Tesla can as an alternative goal Trump supporters on the appropriate, “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 virtually half. Musk’s internet 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 develop into his prime advisor on slashing authorities waste by means of the Department of Government Efficiency (DOGE).

His involvement has spurred each day studies 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 thus far canceled round $60 billion of contracts that fund humanitarian packages around the globe.

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 stated Musk’s entry to delicate authorities knowledge with out ample monitoring was “concerning” and “unprecedented.”

Musk’s different holdings nonetheless rising

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

Unlike Tesla, these companies are usually 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% because the election, citing evaluation from buying and selling platform Caplight. xAI’s share worth has elevated 110% since November 5.

Between them, Musk’s companies have contracts value between $18 billion and $22 billion with the federal authorities, in accordance with US media studies, though these figures might not paint the total image as most of the offers are categorised.

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

Even earlier than he turned 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 stated, would return the EV maker to the “basic model of shareholder governance in America.”

While Musk has stated publicly that his involvement with DOGE is prone to final one other yr, one among 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 international 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 troublesome time juggling his many commitments, telling Fox Business on Monday that he was working his companies “with great difficulty.”

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

The newspaper stated 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 stated he would stay as Tesla’s CEO.

Edited by: Uwe Hessler