Analysts are noting a concerning trend: Elon Musk’s reputation might be deterring potential buyers from Tesla. The CEO’s controversial political stances and personal behavior are causing some individuals to reconsider their interest in the electric vehicle (EV) brand, especially as the EV market undergoes significant changes.
Declining Appeal
Shahar Silbershatz, CEO of market intelligence firm Caliber, expressed that Musk’s influence is likely contributing to Tesla’s decreasing appeal among consumers. Data from Caliber revealed a notable decline in the number of potential EV buyers in the US, partially attributed to Tesla’s divisive CEO.
Tesla’s “consideration score,” which measures consumer trust, likability, and willingness to purchase from a brand, has significantly dropped. In February, this score plummeted to 31%, a stark contrast from its peak at 70% in November 2021, according to Caliber’s metrics.
Shifting Preferences
Some individuals who initially bought Teslas to reflect their environmental values now feel uncomfortable due to Musk’s controversial image. Colin Rusch, a senior analyst at Oppenheimer, noted that these customers are exploring alternatives like Rivian, Volkswagen, and hybrid cars instead of sticking with Tesla.
Consumers are adopting a wait-and-see approach, preferring to observe new market offerings before committing to Tesla, Rusch explained.
Musk’s Controversial Statements
Musk’s recent comments on various contentious topics, including immigration, diversity, equity, inclusion (DEI) policies, the Ukraine conflict, and transgender rights, have sparked backlash. His April Fool’s Day joke about joining Disney as their Chief DEI Officer drew criticism, especially amid concerns about Tesla’s diversity policies.
The CEO’s actions beyond Tesla, such as taking over Twitter as “X,” have amplified public scrutiny. Questions have been raised about Musk’s decisions on Twitter, including layoffs and the removal of journalists from the platform.
Impact on Tesla’s Perception
As a prominent figure associated with Tesla, Musk’s behavior and statements outside of the company directly influence public perception. Caliber’s data indicates that 83% of Americans associate Musk with Tesla, highlighting the significance of his actions on the brand’s reputation.
Several Tesla owners have expressed dissatisfaction with Musk’s conduct, prompting them to reconsider their loyalty to the brand. These concerns, combined with broader issues facing Tesla, such as a year-on-year drop in vehicle deliveries, underscore the challenges the company faces beyond product innovation.
