Elon Musk’s endorsement of former President Donald Trump negatively impacts Tesla’s popularity among Democrats. According to new data from analytics firm CivicScience, Tesla’s favorability among Democrats has plummeted to 16% as of July 16, a 20-point drop since January. Even among Republicans, favorability has declined, falling 13 points to 23%.
CivicScience CEO John Dick told Yahoo Finance, “Democrats, more closely than Republicans, associate Elon Musk and his actions with the brand.” This trend poses a significant challenge for Tesla’s future.
California, known for its commitment to clean energy and electric vehicles (EVs), highlights the issue. Despite the Tesla Model Y being the best-selling car in the state, registrations dropped 17% year-over-year last quarter. The California New Car Dealers Association noted that Tesla sales “may have peaked,” marking the third consecutive quarter of registration declines in the state.
Musk has also frequently criticized California. Last week, he threatened to move the headquarters of X (formerly Twitter) and SpaceX out of California, following Tesla’s earlier move to Texas.
The association stated in April, “Californians’ love affair with electric vehicle giant Tesla may have peaked,” pointing to increased competition from other EV manufacturers. These competitors offer alternatives without the controversies surrounding Musk, who has become a polarizing figure.
Since acquiring Twitter, Musk has delved deeper into politics, voicing opinions on diversity initiatives, election fraud, vaccinations, and immigration policies. His political stances and public comments, often shared via tweet, could harm Tesla’s reputation, which is closely tied to its CEO.
“He completely alienated most of his buying base. … It will kill the business,” Tesla short-seller Mark Spiegel told Yahoo Finance. “I can’t imagine a single Democrat, or, let’s say, very few of them, willing to buy a Tesla at this point.”
Musk’s endorsement of Trump and Ohio Senator J.D. Vance, both opponents of pro-EV policies, further complicates matters. Trump and Vance advocate for increased oil and gas production and are critical of EVs. Trump has claimed that electric cars will “kill” the U.S. auto industry and has criticized automakers’ shift toward EVs as a “transition to hell.” He has also suggested eliminating pro-EV regulations in exchange for support from the oil lobby.
A potential Trump administration could repeal the $7,500 federal EV tax credit, implemented by Biden through the Inflation Reduction Act of 2022. Vance has proposed a similar credit for gas-powered vehicles. Despite these threats, Musk remains unfazed. “Take away the subsidies,” he wrote in a post on X. “It will only help Tesla.”
