Tesla, once closely tied to Elon Musk's identity, now faces serious challenges due to his political actions and statements.
Tesla's Sales Decline
Elon Musk's political positioning has driven away buyers. After Elon aligned with right-wing parties both in the U.S. and abroad, Tesla's sales in traditionally liberal areas began to decline. This shift has led to a decrease in interest among Democrats, even as interest among Republicans grew. However, many Republicans are hesitant to purchase electric vehicles.
Tesla's Global Challenges
The issues for Tesla are not confined to the U.S. In Germany, new car registrations dropped by 76.3% in February, and in France, sales fell by 26%. In China, new car deliveries in February declined by 49% compared to last year. While officials claim the delay is due to anticipation of the new model, analysts dispute this rationale. Elon must consider that his political statements can alienate customers.
Financial Consequences for Tesla
Since January, following Trump's inauguration, Tesla's market capitalization has dropped by $742 billion. While some analysts are betting on Tesla's AI and robotics potential, the situation remains tense for the company. UBS analysts have reduced their forecast for Tesla, citing weak demand and negative brand sentiment. Meanwhile, the company needs to take urgent measures to restore sales.
Tesla faces challenges both domestically and internationally. To regain customer trust, the company must reconsider its strategy and potentially its political affiliations.
