Tesla feels the wrath of anti-Elon Musk backlash

Today at 08:20 AM

By Kara Carlson | Bloomberg

Tae Helton, a car aficionado who lives minutes from Tesla Inc.'s flagship California factory, bought one Tesla for the family fleet and nearly purchased a second one last year.

After Elon Musk made gestures resembling a Nazi salute at an inauguration event for President Donald Trump last month, he wants nothing to do with the brand.

"The pride and the good feeling I had driving in it is gone for me," Helton said of the Model 3 he's driven only around 2,500 miles. The politically moderate 49-year-old plans to pay off his car loan early and trade in the sedan before year-end.

Helton has company among Tesla customers and consumers. The EV maker's sales fell 45% across Europe in January, following its first annual decline in global deliveries in over a decade. The company is showing particular signs of strain in places where its chief executive officer is inserting himself in politics in ways that run counter to Tesla's stated mission and values.

RELATED: Tesla sales decline in California with Model 3 plunging 36%

In California, Tesla sales fell 12% last year as Musk attacked leaders of a state that played a pivotal role in the carmaker surviving its tumultuous early years and becoming one of the world's most valuable companies.

In Germany — where registrations plummeted 41% last year and 59% in January — the billionaire emphatically supports a far-right party that denies the harm of carbon dioxide emissions. And in the UK — now Europe's biggest electric-vehicle market — Musk has aligned with politicians who want net zero targets scrapped and have cast policies aimed at boosting EV adoption as a "war on drivers."

"Tesla's biggest challenge in 2025 isn't technology — it's perception," says Jacob Falkencrone, global head of investment strategy at Saxo, the Danish bank with more than €105 billion in client assets. "Elon Musk's political baggage is now weighing on sales, brand loyalty and investor confidence."

Musk's polarizing behavior is nothing new, nor are indications that many of his customers have soured on him. In 2023, Bloomberg News surveyed more than 5,000 Tesla owners, and sentiment on the CEO took the biggest plunge among all the topics consumers had been asked about four years earlier.

But the backlash against Musk has gone to another level this year.

"I don't know if there's ever been a greater destruction of brand equity in this short amount of time," said Tom Price, a resident of Berkeley, California, who showed up to a demonstration in the city with a Don't Drive DOGE sign. "Tesla has become a four-wheel billboard for the immolation of our democracy."

Musk is polling poorly among Brits, Germans and Swedes, with a survey in the latter country also finding increasingly negative attitudes toward Tesla. Model Y registrations in Sweden fell 48% last month, while Model 3 sales dropped 31%.

Pew Research found a majority of Americans view Musk unfavorably, while Quinnipiac University says a preponderance of voters think he has too much power to make decisions affecting the US. A Republican strategist advocating for bipartisan EV adoption in the country found Musk is now more popular with people who drive gas cars than he is with those driving electric.

"I used to be adored by the left," Musk said during a joint interview with Trump by Fox News' Sean Hannity that aired last week. "Less so these days."

Tesla management told investors last month to expect its vehicle business to return to growth this year, though they avoided offering specific figures. Three months earlier, Musk said he saw potential for a 20% to 30% sales jump.

There are reasons to be optimistic Tesla can sell more cars this year, despite the slow start. Some of its early-year sales weakness is tied to changing over production lines for its most popular vehicle, the Model Y, which has been redesigned. Updating all four of the factories assembling the sport utility vehicle will result in several weeks of lost output this quarter, Chief Financial Officer Vaibhav Taneja said last month.

Tesla also has told investors that more affordable models are on track to go into production starting in the first half of this year, though they've offered little detail about the vehicles. While the carmaker's shares have fallen 37% from a record high reached in mid-December, they're still up 20% since the Nov. 5 election.

Some consumers won't be giving Tesla's new models a look. Eric Thurber, a San Francisco Bay area resident who bought a Model 3 in 2021, expected to keep his car for at least five or six years. After Inauguration Day, he decided to sell at a steep loss.

"I couldn't handle what Elon Musk was doing anymore," the 58-year-old said. Thurber had checked on the resale value of his car months earlier and was getting periodic updates indicating that it was depreciating precipitously. While he still owed about $27,000 on the Model 3, he wanted out when Carvana estimated it was worth roughly $22,000. He traded the car in for a BMW i4 electric sedan.

Micah Barber, a college professor in Austin, where Musk moved Tesla's headquarters to in late 2021, currently drives a gas-burning Chevrolet Equinox SUV and plans to make the family's next vehicle an EV. While he's admired how much innovation Tesla brought to the auto industry, he's ruled out buying one of the company's cars because of Musk.

"He's become one of the most dangerous people in our country," Barber, 43, said of Musk at a protest staged this month at Tesla's showroom in the Texas capital.

The brands accumulating market share at Tesla's expense have varied by market. In California, Honda and Hyundai gained the most share of the state's EV market last year. In Germany, Volkswagen AG's VW, Seat and Skoda, and BMW AG's namesake brand registered the biggest increases in January sales.

The majority of Lucid Group Inc. customers historically have owned Teslas, and the maker of the $69,900 Air sedan has seen increasing interest in the last several quarters, the company said in an emailed statement. The CEO of Polestar, the EV maker spun off from Volvo Car AB, told Bloomberg News last month that he'd directed salespeople to target disgruntled Tesla owners.

"Three or four years ago, you could say that it was kind of a one-horse race," BJ Birtwell, the CEO of Electrify Expo, which hosts EV festivals for consumers across the US, said of the market dynamics. "Now, it's so hyper-competitive that most auto manufacturers have really strong offerings that are creating the type of competition for Tesla that they've never seen."

Helton, the Model 3 owner who was keen to buy cars built near his home in the Bay area — including by friends working at Tesla's factory — made tentative plans to purchase another one of the company's vehicles from the first test drive his family took last year. While he'd observed some "red flags" about Musk when he ordered the sedan in May, he wasn't inclined to hold it against the whole company.

After Musk ratcheted up his political activities, the human resources professional grew reluctant to double-up on the Tesla brand. His family decided to lease a Hyundai Ioniq 5 instead.

"I always felt like if my vote didn't impact what I was wanting, the other way I can vote is through the vote of my wallet, whether it's Tesla or anything else," Helton said. "I've been voting with my wallet lately."

–With assistance from Dana Hull, Marilen Martin, William Wilkes and Wilfried Eckl-Dorna.

More stories like this are available on bloomberg.com

©2025 Bloomberg L.P.