Tesla CEO Elon Musk takes the stage at a rally for Republican presidential nominee Donald Trump at Madison Square Garden in New York on Oct. 27.
E lon Musk took a break from stumping for Republican presidential candidate Donald Trump to join Tesla’s third-quarter results call. The electric car maker’s better-than-expected profit news sent the stock soaring, wiping out a slump that persisted for much of the year. Fielding softball questions from Tesla fans and analysts, the billionaire CEO was notably more impassive than in his spasmodic hopping-filled campaign appearances. Not once during the meandering 72-minute call was Tesla’s volatile leader asked the most obvious question: should he take strident public stands on politics and social issues that are at odds with Tesla core buyers who largely identify as Democrats?
“Tesla’s are the best cars so it still has this advantage. But over time it will become harder for Tesla to get new customers due to his politics,” said long-time investor and former Musk fan Ross Gerber, CEO of Los Angeles-based wealth manager Gerber Kawasaki, who still has a $52 million stake in the company. “Most CEOs intelligently stay out of politics for good reason. Elon doesn’t care about how his right-wing (ironically anti-environmental) support hurts Tesla.”
31% of car shoppers say they’re now less likely to consider purchasing a Tesla as their next vehicle specifically because of Musk.
Multiple consumer surveys back this up. For example, 46% of people in the market for an electric or plug-in hybrid vehicle identify as Democrats, while only 21% and 25% of buyers of those vehicles say they are Republicans, according to data from Strategic Vision, a San Diego-based research firm that surveys tens of thousands of consumers weekly. Auto researcher Edmunds found in its most recent survey data that 31% of car shoppers say they’re now less likely to consider purchasing a Tesla as their next vehicle specifically because of Musk.
“Musk's behavior has turned off Democrats and at times the abandonment of the Democratic party for Tesla was significant,” Strategic Vision CEO Alexander Edwards told Forbes, adding that it also hasn’t done much to drive EV sales to Republicans. “The net result is a substantial drop in future consideration of a Tesla by any automotive buyer today.”
His political gamble comes at an awkward time for Tesla. Though it managed to boost sales in the third quarter, year to date the brand’s global sales volume is down 2.3%. In the U.S., Tesla’s sales this year through September are down 4.5% even as overall EV sales are up 8.7%, according to Cox Automotive. In California, a highly Democratic state that’s been key to Tesla’s success since its founding and remains the top domestic market, Tesla sales are down about 13% this year.
Major public companies and CEOs in the U.S., particularly those that sell products to the........