It was perhaps the clearest sign yet that Tesla CEO political maneuvering has backfired. On Tuesday, US President stood alongside the tech billionaire and a red Tesla Model S outside the White House, declaring he was buying the electric car for his staff to use and paying full price.
Trump’s unprecedented endorsement of the (EV) giant comes after months of mounting criticism over Musk’s deepening involvement in both and — including support for far-right parties in Europe — and after billions of dollars were wiped off Tesla’s shares.
That Musk sought the president’s public backing suggests that protests, consumer boycotts and even on Tesla vehicles, charging stations and production plants have unsettled the world’s wealthiest man and spooked Tesla investors. Trump condemned those incidents as cases of “domestic terrorism.”
Could politics be blamed for falling Tesla sales?
Tesla’s plunging sales have added to the pressure. In , where Musk used his to (AfD) party ahead of last month’s national elections, Tesla registrations fell 76% in February compared to the previous year. EV registrations overall in Germany surged by nearly a third over the same period.
A similar trend is emerging elsewhere, including where Tesla sales fell by 45% in the first two months of the year, while saw sales fall by more than a third in the four months since Trump’s reelection.
In California, the biggest US market for EVs, Tesla sales fell for the fifth consecutive quarter, according to the California New Car Dealers Association (CNCDA). In 2024, Tesla registrations in the Golden State dropped by 11.6%.
Consumers appear to be steering clear of Musk’s EV brand amid accusations of political interference and a too-cozy relationship with Trump. Many Tesla owners have put stickers on their EVs in opposition to Musk’s shift to the right, with slogans that read: “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 told the Associated Press last week. “Tesla was in the sweet spot. Now it has competition.”
A recent Strategic Vision survey asked Americans to name their favorite vehicle and while both Republican and Democrat voters chose an EV over combustion-engine models, neither picked Tesla.
Daniel A. Crane, a law professor at the University of Michigan and the author of an upcoming book about Tesla, noted how, until recently, 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 told DW.
Crane said while Musk may think Tesla can instead target Trump supporters on the right, “MAGA folks tend to be the most EV-skeptical.”
Days numbered for ‘Teflon Elon’ monicker
The intense rivalry between EV makers has sparked a major selloff in Tesla stock. Over the past three months, shares in Musk’s carmaker have fallen by almost half. Musk’s net worth has dropped by $144 billion (€132 billion) over the same period amid growing skepticism of Tesla’s promise to deliver autonomous driving harnessing artificial intelligence (AI).
The company’s valuation peaked at more than $1.5 trillion after the US presidential election but on Monday alone, Tesla stock dropped 15%, in a market selloff prompted by fears of a looming US .
to the tune of $250 million and has since become his top advisor on slashing government waste through the Department of Government Efficiency (DOGE).
His involvement has spurred daily reports of slashed public-sector spending, welcomed by many US voters but criticized by activists, academics and lawmakers as lacking proper oversight.
Growing outrage over Musk’s role in DOGE
Tesla Takedown protests have erupted at dealerships across the US recently over Musk’s role in DOGE, which has so far canceled around that fund humanitarian programs around the world.
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 at the Ford School of Public Policy at the University of Michigan, told Reuters news agency last month.
Moynihan said Musk’s access to sensitive government data without adequate monitoring was “concerning” and “unprecedented.”
Musk’s other holdings still growing
As well as Tesla, Musk owns Space X, the first private space company. His other ventures include Neuralink, which is developing an interface implanted in the brain, xAI, which created the AI chatbot Grok and the social media platform X. The infrastructure, tunnel construction and equipment firm named The Boring Company is also owned by Musk. He also has ambitions to colonize Mars.
Unlike Tesla, these firms are not publicly listed but can still be traded by investors on the secondary market. Bloomberg reported Wednesday that while Tesla’s value has plummeted, the collective valuation of four of Musk’s private firms is up 45% since the election, citing analysis from trading platform Caplight. xAI’s share price has increased 110% since November 5.
Between them, Musk’s firms have contracts worth between $18 billion and $22 billion with the federal government, according to US media reports, although those figures may not paint the full picture as many of the deals are classified.
Those contracts and the fact Musk’s firms have been investigated or fined more than 30 times by 11 US government agencies, according to the New York Times, have raised alarm bells about possible with his involvement with DOGE.
Even before he became a close advisor to Trump, investors had also questioned whether Musk had spread himself too thin.
Is Musk’s time up at Tesla’s helm?
Last month, Brad Lander, the New York City comptroller, who oversees employee pension funds that own Tesla shares worth $1.25 billion, told the New York Times that Musk should step down as Tesla CEO but remain on the board. This, he said, would return the EV maker to the “basic model of shareholder governance in America.”
While Musk has said publicly that his involvement with DOGE is likely to last another year, one of Telsa’s most bullish investors of Wall Street, Dan Ives, now thinks he should quit his commitment 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 is global head of technology research 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 poll by US investment bank Morgan Stanley published Wednesday found that 85% of investors thought Musk’s move into politics has either had a “negative” or “extremely negative” impact on Tesla’s business.
Musk himself has admitted having a tough time juggling his many commitments, telling Fox Business on Monday that he was running his businesses “with great difficulty.”
Despite this, he appeared to double down in his support for Trump’s presidency. The New York Times reported Wednesday that Musk is planning a further financial boost to Trump’s political operation worth $100 million, citing several people familiar with the plan.
The newspaper said the donation was an “unheard-of” move by a White House staffer.
While pictured alongside Trump, Musk told reporters on Tuesday he would stay in Washington as long as he was useful, but said he would remain as Tesla’s CEO.
Edited by: Uwe Hessler
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