Elon Musk's embrace of right-wing politics caused 'reputational downfall' and ... trends now
The number of would-be Tesla buyers is shrinking, says a survey by market intelligence firm Caliber, which links the drop to CEO Elon Musk's embrace of conservative views.
While Tesla continued to post strong sales growth last year, helped by aggressive price cuts, the electric-vehicle maker is expected to report weak quarterly sales in the coming days.
Caliber's 'consideration score' for Tesla, fell to 31 percent in February, less than half its high of 70 percent in November 2021, when it started tracking consumer interest in the brand.
Tesla's consideration score fell 8 percentage points from January alone even as Caliber's scores for Mercedes, BMW and Audi, which produce gas as well as EV models, inched up during that same period, reaching 44-47 percent.
Elon Musk's pivot to right-wing politics is hurting sales of his electric vehicles, report says
Tesla's consumer score fell from 70 percent in November 2021 to 31 percent in February
Tesla did not respond to a request for comment.
Musk in the past has blamed high-interest rates for curbing consumer demand for big ticket items like cars.
Declining support for the company come as Musk takes increasingly hard-line positions on everything from diversity hiring to gun rights and freedom of speech.
Caliber cited strong associations between Tesla's reputation and that of Musk for the scores.
'It's very likely that Musk himself is contributing to the reputational downfall,' Caliber CEO Shahar Silbershatz told Reuters, saying his company's survey shows 83 percent of Americans connect Musk with Tesla.
Five marketing, polling, and car experts also said controversies surrounding Musk's increasingly right-wing politics and public statements are weighing on Tesla's brand and demand.
'It is hard enough to win sales without getting into politics,' said Tim Calkins, a marketing professor at Northwestern University's Kellogg School of Management.
Economic fears, the lack of affordable new models and rising competition from cheaper rivals like China's BYD have also been cited by Wall Street analysts as putting pressure on Tesla.
Overall electric vehicle sales in the US are forecast to grow 15 percent in the first quarter of this year, according to estimates by researcher Cox Automotive.
Tesla sales are projected to increase by 3 percent.
Tesla shares are down nearly 30 percent year to date
'The EV slowdown is shaping up to be a Tesla slowdown,' said Cox analyst Stephanie Valdez Streaty.
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