Democratic Buyers Turn Away from Tesla After Musk’s Trump Endorsement
Elon Musk’s endorsement of former President Donald Trump has led to a noticeable decline in Tesla’s appeal among Democratic voters.
As of July 16, Tesla’s favorability among Democrats has dropped to 16%, a significant decrease of 20 percentage points from January. This decline follows Musk’s increasing involvement in political matters and his support for Trump, who has advocated for expanding domestic oil production. According to new data from CivicScience, this drop in favorability is accompanied by a 13 percentage point decline among Republicans, bringing their favorability to 23%.
CivicScience CEO John Dick noted that Democrats are more likely than Republicans to associate Musk’s controversial actions with Tesla. In California, a key market for electric vehicles (EVs), Tesla’s Model Y, despite being the best-selling car, has seen a 17% decline in registrations over the past year. This marks Tesla’s third consecutive quarter of falling registrations in the state. The California New Car Dealers Association suggests that sales might have peaked and that competitors are offering more EV options without the political baggage associated with Musk.
Musk’s criticism of California has been notable. Recently, he announced plans to move the headquarters of his companies X and SpaceX to Texas, following Tesla’s relocation. The California New Car Dealers Association commented in April that the state’s enthusiasm for Tesla may have waned, partly due to increased competition in the EV market.
Musk’s political engagement has intensified since his acquisition of Twitter, now X. He has publicly criticized diversity initiatives, spread claims about election fraud, and voiced opposition to vaccinations and the Biden administration’s immigration policies. These actions have affected Tesla’s reputation, as Musk’s public comments often reflect back on the company.
Mark Spiegel, a Tesla short seller, expressed concern that Musk’s political stance could damage Tesla’s business. He commented that very few Democrats might be inclined to buy a Tesla at this point due to Musk’s controversial positions and endorsements.
Musk’s support for Trump and venture capitalist J.D. Vance, both critics of current pro-EV policies, further complicates the situation. Trump and Vance favor domestic oil and gas production over clean energy. Trump has criticized the push for electric vehicles, calling it detrimental to the U.S. auto industry, and has suggested that pro-EV regulations might be rolled back if he returns to office. Vance has even proposed a tax credit for gas-powered cars.
The potential repeal of the $7,500 federal EV tax credit, established by the Inflation Reduction Act of 2022 under President Biden, could negatively impact Tesla’s sales. However, Musk has expressed indifference to such changes, stating that removing subsidies would ultimately benefit Tesla.
In summary, Elon Musk’s recent political endorsements and controversial comments have led to a decline in Tesla’s favorability among Democratic voters, reflecting broader concerns about the company’s image and future in a competitive EV market.
