Early data suggests Tesla CEO Elon Musk’s foray into public service has not been beneficial for the car company.
What’s happening?
Amid backlash to his oversight of severe government cuts, Tesla trade-ins surged and the company’s stock plummeted, Reuters reported.
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Edmunds data revealed the electric vehicles accounted for 1.4% of all vehicles traded in from March 1-15, compared to 0.4% in March 2024. The figure, which was 1.2% in February, could have risen through the end of the month.
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While it could still be seen as an overall low percentage of overall trade-ins, the number has never been higher and includes trade-ins at dealerships for new or used vehicles. Drivers who bought new Teslas or EVs from other direct-to-consumer companies were not included.
“I thought about putting a bumper sticker on my car saying, ‘I hate Musk.’ But selling the car feels so much better,” Fred McKinney, who traded in a 2018 Model 3 in February, wrote on LinkedIn, per Reuters.
Why is this important?
Musk, the Tesla CEO, also heads the Department of Government Efficiency, which has fired federal employees and eliminated programs such as the Agency for International Development. Some of the actions have been ruled in court as going against the law.
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Some Tesla owners have responded by rebranding their EVs, and activists have protested and vandalized the company’s vehicles, charging stations, and dealerships.
The fallout has reached Europe and is especially bad in Germany, with many of the country’s citizens seemingly changing their opinion about Tesla after Musk’s support of the country’s far-right AfD party, whose most prominent politician has been accused of “‘whitewashing’ Nazi crimes.”
“Brand loyalty is becoming a bigger question mark as factors such as Elon Musk’s increasing public involvement in government, Tesla depreciation concerns and its increased saturation in major metro areas leave some longtime owners feeling disconnected from the brand,” Jessica Caldwell, Edmunds head of insights, told Reuters.
What’s the result of falling Tesla sentiment?
Tesla stock peaked at $488.54 on Dec. 18, six weeks after the presidential election, before plunging to $222.15 on March 10, seven weeks after the inauguration. It closed at $263.55 on March 28. Edmunds said only 1.8% of shoppers considered the brand in February after a high mark of 3.3% in November; the former figure was the lowest since October 2022.
