When 55-year-old publicist Anne Marie Squeo received her red Tesla sports car in 2020, she felt as if she had joined a special “club” of people who were doing something to help the environment — but not giving up. drive in style.
But last year, when Tesla CEO Elon Musk shared right-wing conspiracy theories on Twitter, posted a photo of guns beside his bed and proposed terms for resolving the war in Ukraine that were rejected by all major leaders, Anne Marie’s satisfaction gave way to shame.
“It’s been very depressing and sometimes embarrassing to drive around in this car,” says the Connecticut-based woman who has written an article about her discomfort. “I wonder if people are passing judgment on me.”
Once hailed as the secret to Tesla’s success, Elon Musk now appears to be one of its biggest problems as his constant stream of political posts on social media alienates an important part of the brand’s customer base. At the same time, increased competition is beginning to erode the company’s dominance in the electric car market.
Tesla’s stock value plunged by about two-thirds last year — the biggest drop since the company went public in 2010 — reflecting these and other concerns, such as production disruptions, the effect of high borrowing costs and the of demand in a weaker economy.
In December, big investors — many of them longtime Musk allies — went public with their concern, accusing him of damaging the brand and abandoning Tesla after its $44 billion acquisition of Twitter in October.
The fact that Musk sold about $20 billion worth of Tesla shares last year — sales that weighed on the stock and were driven, at least in part, by the Twitter buy — didn’t help.
“It cost everybody a ton of money. It certainly didn’t protect Tesla’s shareholders,” says investor Ross Gerber, who is now seeking a seat on Tesla’s board of directors and calling for changes, including starting to spend money on advertising – which Tesla Tesla has long prided itself on being able to do without.
Gerber, head of an investment management firm, says he is a friend of Musk and remains optimistic about the company’s future. He increased his stake in the company as the stock plummeted.
But he says the company needs to have a dedicated chief executive and create its own voice, distinct from Musk.
“It’s very hard to believe now that Elon is a positive publicity force for Tesla,” he says.
Musk, who has more than 127 million followers on Twitter, this week denied that his social media style was hurting the Tesla brand, saying his mass of followers “speaks for itself”.
But in recent weeks, faced with demand concerns, Tesla has announced big price cuts in the US, Europe and China — going as high as 20% on some models in the US.
Analysts hope the move will mitigate some of the damage to the brand, as financial considerations trump shoppers’ moral qualms.
But the move will hurt the company’s profit margins, and for some car buyers, there’s no turning back.
Indie Grant, who works in the insurance industry in New Zealand, ditched Tesla when he bought an electric car last year, opting instead for a Peugeot. The main reason was Musk’s political positioning.
“With him so attached to the brand, buying a Tesla feels like you’re saying you think he’s great and love everything he does,” says the 35-year-old New Zealander.
“That really wasn’t the message I wanted to send, and with so many options, ruling out Tesla wasn’t too difficult.”
He says that even the price discount wouldn’t make him buy a Tesla.
“My opinion of Tesla would only change if he (Elon Musk) was no longer associated with it,” he says.
Musk has had PR issues over his social media posts before. One — about the possibility of taking Tesla private in 2018 — sparked accusations of fraud by regulatory agencies that cost millions to resolve.
Musk had to defend, in a statement to Justice on the 20th, the maintenance of his position as the company’s main executive. Shareholders had filed a class action lawsuit against him, calling for his departure. They say they lost out on stock price swings because of Musk’s posts.
Musk recently won another lawsuit, involving a man who was part of the rescue of Thai students who were trapped in a cave. Musk had been sued for defamation for insulting the rescuers, but won the suit arguing that he didn’t think his insult would be taken seriously.
Now, though, Musk isn’t just another person tweeting; he owns the platform.
That has increased the reach of his political views, which he shares with increasing frequency, and has affected how Twitter moderates the site’s content — an issue described by many, including Musk, as important to American democracy.
After taking over, Musk acted quickly to release the account of former US President Donald Trump, who had been expelled from the platform because of messages published before the attacks on the Capitol.
Musk also posted a tweet that read, “My pronouns are Sue/Fauci”—referring to physician Anthony Fauci, who led the nation’s response to the COVID-19 pandemic.
All of this has caused outrage among progressives, who are the public most likely to buy electric cars in the US, Tesla’s biggest market.
“This is largely a political issue,” says Jordan Marlatt, technology analyst at Morning Consult, which tracks public perceptions of thousands of US brands. He says he has seen a sharp decline in Tesla preference among Democrats since last April, when Musk announced the deal to buy Twitter.
“He has been speaking much more openly about his personal political views than before and this is affecting consumer perceptions.”
Marlatt says brands typically recover from damage from incidents involving political issues in about three months.
“What’s different for Twitter and Tesla is this constancy,” he says. “It’s every day, almost every hour sometimes.”
Anne Marie, who has voted for both Democrats and Republicans, says past controversies have seemed like one-off events, but the flood of comments over the past year has taken a toll.
“Elon Musk being a loudmouth is nothing new,” she says. “What’s changed is that level of consistency in doing it every day and the fact that he was really meddling in some matters with the apparent intent of pissing people off.”
She says that right now she can’t imagine buying a Tesla the next time she needs to change cars.
“At the end of the day, there’s a lot of variety to choose from – are you really going to align yourself with a company that perhaps no longer represents your values? I wouldn’t feel comfortable doing that.”
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