Elon Musk's Policy Could Drive Some Buyers Away From Tesla

Few auto executives are as closely identified with the companies they run as Elon Musk, the CEO of Tesla. And perhaps no one is more prolific at spreading their political views on social media.

But as Mr. Musk’s public persona has become increasingly right-wing, Tesla appears to be paying a price in sales, especially among liberal and left-leaning customers who are much more likely to buy battery-powered cars than conservatives, according to analysts and many car owners who responded to a survey on the New York Times website about whether his behavior has influenced their opinion of Tesla.

His image as an impulsive and unpredictable manager seems to have rubbed off on the cars, raising doubts in some people’s minds about their quality and helping explain why Tesla sales are down. On Tuesday, the company reported that its second-quarter global sales fell 4.8 percent from the same period a year earlier, after a decline of 8.5 percent in the first three months of the year.

“Musk is a real lightning rod,” said Ben Rose, president of Battle Road Research, who has a generally positive view of Tesla stock. “There are people who swear by him and people who call him names. There’s no doubt that some of his comments are really off-putting to some people. For a subset, enough to buy another brand.”

Tesla and a representative of the company’s board of directors did not respond to requests for comment.

Some of the more than 7,500 people who responded to The Times’s survey said they had been offended by what they perceived as anti-Semitism on the part of Mr. Musk, which he denies. Some were upset with the way Mr. Musk has run Twitter, now called X, since he bought the company in 2022. He has laid off thousands of employees and removed protections on content shared on the social media platform. His increasingly cozy relationships with former President Donald J. Trump and other conservative figures were also cited as concerns. The vast majority of readers who responded to the survey were critical of Mr. Musk.

“You’re basically driving a giant red MAGA hat,” said Aaron Shepherd, a Microsoft product designer in Seattle who has said he wants to buy an electric Volkswagen ID.4 instead of a Tesla.

It’s not possible to know what price Tesla has paid for Mr. Musk’s political statements and activities. What is clear is that Tesla, once the world’s leading seller of electric vehicles, has lost market share in many countries for a variety of reasons. Chief among them is the company’s reliance on the Model Y sport-utility vehicle and Model 3 sedan, which haven’t been substantially updated in years, for nearly all of its sales. Other companies are luring buyers by introducing new or updated cars more frequently.

In China, domestic automakers such as BYD have gained ground on Tesla by offering more affordable cars with features that appeal to Chinese consumers, such as karaoke. In Europe, BMW, Volkswagen and other local brands are doing well by offering cars that are more luxurious or cheaper than Tesla. And in the U.S., Hyundai-Kia, Ford Motor and General Motors have increased sales by offering a growing selection of models.

Times readers who responded to an online questionnaire said they were unimpressed by Mr. Musk's statements and their experiences with Tesla cars and services: The company sells and services cars directly, not through dealerships.

“There was a point where I would have given Musk an organ if he needed one,” said Tim Yocum, a chief technical officer at a software company. But Mr. Yocum, who lives in Chicago, said he had had problems with his Tesla Model S and was dissatisfied with the company’s repair and maintenance services. Mr. Musk’s right turn also upset him.

“Tesla is the only manufacturer in modern times that has made no excuses for its CEO to pick up a tiki torch for its good name,” Mr. Yocum said. “This will be the last Tesla I own.”

Such comments help illuminate polls that say Tesla’s reputation has suffered recently. The company slipped to 63rd place in the 2024 Axios Harris Poll 100, which asked respondents about their views on corporate brands. In 2021, the company was eighth.

Mr. Musk has argued that his public statements and personality do not affect Tesla sales. “We make the best cars,” he told the Times’ DealBook Summit in November. “Whether you hate me, like me or are indifferent, do you want the best car or not the best car?”

Mr. Musk still has many passionate admirers. And some have said the executive’s public statements would not have affected their decision to buy a Tesla. Many have credited him with pushing the auto industry toward electric vehicles, a powerful tool in combating climate change.

“He’s led a company that has successfully disrupted a corrupt and lazy auto industry,” said Julian Mehnle, a software engineer who lives in San Francisco. Although no fan of Mr. Musk, Mr. Mehnle said, “I’m old enough to separate those concerns from my choice of consumer products.”

Robert Dean, an architect who lives in Redding, Connecticut, echoed these sentiments: “Musk is a gigantic, disruptive talent with a transformative and positive effect on the world we live in. He's also an eccentric personality, but I won't marry him; I'll buy cars from a company he runs brilliantly.”

Most Tesla shareholders remain broadly supportive of Mr. Musk. Last month, investors approved a $45 billion compensation plan for him by a wide margin.

Yet car buyers The Times heard from and analysts said Mr. Musk’s political activity has clearly damaged the company’s reputation among left-leaning consumers. And there’s little evidence that Mr. Musk’s rightward shift has attracted more conservatives to buy Teslas. Indeed, 77 percent of Republicans and Republican-leaning voters said this year they were not interested in battery-powered cars, up from 70 percent who said the same last year, according to the Pew Research Center.

“He might win over some people who like his position,” said Greg Silverman, global director of brand economics at Interbrand, a consultancy that advises clients on marketing strategies. But, he added, the odds that Mr. Musk is attracting more customers rather than alienating them “are very low.”

According to Interbrand research, a CEO or other company representative who offends customers can reduce sales by up to 10 percent, Silverman said.

Some car owners’ concerns went beyond Mr. Musk’s political statements. They cited allegations of racial discrimination at Tesla factories or the perception that he has allowed racist content to thrive on X. Tesla has denied tolerating discrimination at its factories.

“My mother was seriously considering buying a Tesla,” said Achidi Ndifang, who works in information technology in Baltimore. “As a black person, I thought it would be an insult for my mother to drive a Tesla.”

Derek Morf, a high school math teacher in Verona, New Jersey, who owns a Tesla, said he was alarmed when Tesla removed the Disney Plus app from some dashboard screens late last year, apparently because Mr. Musk was angry with Robert A. Iger, Disney’s chief executive.

Mr. Morf didn’t much care for the Disney app, which he barely used. But, he said, he found it disturbing “that the vehicle I purchased could have characteristics changed in an instant simply because one man had so much control.”

Such concerns could be a liability for Tesla as it invests resources in self-driving technology. Mr. Musk has promised to unveil a self-driving taxi on August 8. The technology cannot succeed without consumer confidence.

Many Times readers pointed out that other automakers had their own baggage. Volkswagen had an emissions scandal a few years ago. Henry Ford, the founder of Ford Motor, advocated and spread anti-Semitic views. A decade ago, GM sold cars with faulty ignition switches that were blamed for more than 100 deaths.

Established automakers still sell gasoline-powered cars that emit greenhouse gases and other pollutants. Tesla sells only electric cars.

But probably no other auto executive has as powerful a megaphone as Mr. Musk, or is more willing to use it.

“If people think that other CEOs are saints, I think they’re a little naive,” said Jan Leys, a Tesla owner in Zurich. “They just don’t have the big mouth and/or platform that Elon Musk has.”

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