by Lisa Downey Merriam
The Tesla brand has always been about more than just a car. At one point it was “synonymous with innovation, excitement, and the future,” according the Futurism, a sentiment echoed by Wired. Forbes agreed, it wasn’t selling cars, but the ability to anticipate the future that made the Tesla brand so special. The Atlantic described the “mountain of superlatives behind Tesla” being the “most valuable car company in the United States.” In 2017, Tesla was brand value was $50.84 billion, ahead of former #1 GM at $50.79 billion and former #2 Ford at $45 billion.
And now?
- Sales are in rapid decline, selling 1.79 million vehicles in 2024 versus 1.81 million in 2023. European sales in January 2025 are half of what they were a year ago and Australia sales are down 70%.
- The Telsa (TSLA) stock price has taken a hit, down from a 12/9/2024 high of $436.24 to $233.71 on 3/10/2024.
- Tesla’s brand value is now just $43 billion, down from where it stood at the start of 2024 at $58.3 billion
- Tariffs and an end to subsidies suggest a deeply troubled future
Musk made the Tesla brand toxic to those most likely to buy it
Though he describes himself as a political moderate and voted for Barack Obama in 2008 and 2012, Hillary Clinton in 2016, and Joe Biden in 2020, CEO Elon Musk supports President Trump and is taking a chain saw to the U.S. government as the leader of DOGE. Trump supporters see him as attacking waste, fraud and abuse. Progressives vilify him as a fascist and an oligarch.
The truth about Musk doesn’t matter. How you see him depends on your politics, and that is exactly what is so toxic for the Tesla brand. The core target market for the Telsa brand has been the progressive left and that is also the group that hates Musk the most. While Republicans adore Musk, they are not electric vehicle buyers. According to Gallup:
- 83% of Democrats would consider owning or do own an electric vehicle
- 71% of Republics would not consider buying an electric vehicle
Opinions are highly divided:
- Regarding arson and violence at Tesla dealers, Progressives, i.e. Tesla customers, see these events as valid grassroots protests. Republicans see them as faked Soros-backed attacks where protesters are paid to show up.
- Progressives see Trump’s purchase of a Tesla as a stunt and free advertising for Musk, yet Republicans point to Biden doing the same thing promoting Jeep EVs on the White House lawn.
Again, where you stand determines your view of the Tesla brand. We previously discussed the impact CEOs have on brands <link to our article>. The Elon Musk brand has become toxic to Tesla’s core buyers, including those who have already bought one. Tesla owners fear vandalism. Some express shame for owning a Tesla. Others are selling their Teslas. It is increasingly common to see Tesla drivers disassociate their choice of vehicle from the man at the head of the brand.
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What is next for the Tesla brand?
Tesla was facing headwinds before the Elon Musk controversies. These include build quality issues, autopilot malfunctions, battery failures and fires, and the high cost of ownership, to name a few. Owners of EVs realize the promise doesn’t match reality given the limited range, poor performance in low temperatures, and expensively inconvenient charging. Tesla will not be immune from the negative impacts of tariffs, real and threatened. The end of EV tax subsidies in the U.S. will hurt all electric vehicle brands, including Tesla.
Moving forward, the Tesla brand faces risks:
- Investors may grow more rattled if the stock price keeps sinking. They may seek to divorce the brand from Elon Musk
- Sales may continue to plummet as Musk continues to alienate buyers
- Chinese brands have a 76% global market share in hybrids and electric vehicles, even without the U.S. market
- Keeping good employees may be challenging as some are repelled by Musk’s politics
- Legal and regulatory troubles may intensify
That said, even with all of the business declines, Elon Musk remains the world’s richest man and that gives him resources and resilience. The brand is so tied to Musk, it is unlikely the board will oust him. He is turning around Twitter/X. Though a shell of its former self (earning $5 billion in 2021, and in 2023, just $2.5 billion), some advertisers are cautiously returning and the company is finally profitable. Other Musk ventures, especially SpaceX, could fund a brand downturn and eventual revival.
The Tesla brand will survive. It still is the leading EV brand and most charging stations are Tesla-owned and branded. Future innovations could overcome some of the negatives of the Tesla brand and EVs in general. The market will grow beyond EV enthusiasts to become more mainstream, appealing beyond the Progressive core.
When a brand is so thoroughly tied to a CEO, it rises and falls with that CEO’s reputation. How can Musk overcome the collapse of his reputation among core Tesla brand buyers? How can he get anti-EV Trump supporters to buy the Tesla brand? Let us know what you think? Is it possible?