MAGA-mobiles?: How Trump's embrace of Tesla could hurt the brand in its biggest market

MAGA-mobiles?: How Trump's embrace of Tesla could hurt the brand in its biggest market

  • 17.03.2025 12:08
  • msn.com
  • Keywords: Tesla, Musk

President Trump’s purchase of a Tesla and promotion at the White House aimed to boost sales for Elon Musk but may backfire in California, Tesla’s largest market. Public backlash against Musk has led to declining sales and protests, further hurting Tesla’s stock.

Tesla NewsTSLAsentiment_dissatisfied
open_in_newOriginal article

Estimated market influence

Tesla

Tesla

Negativesentiment_dissatisfied
Analyst rating: Neutral

The article discusses how Tesla's stock has dropped significantly, with a 50% decrease since mid-December, leading to an $800 billion loss in value. Additionally, Tesla's sales in California have declined by 11.6% last year compared to 2023, and their market share has decreased from nearly 80% to 52%. This negative sentiment could impact their position as the dominant EV brand in California.

Elon Musk

Negativesentiment_dissatisfied
Analyst rating: N/A

Musk's public image has been tarnished due to his political involvement, leading to protests against Tesla showrooms and a decline in stock value. His role in supporting conservative causes has likely contributed to the negative perception of Tesla among liberals.

White House

Positivesentiment_satisfied
Analyst rating: N/A

The White House, under Trump's leadership, has embraced Tesla by showcasing it on the lawn, which was intended to boost sales and support Musk. However, this move may have unintended consequences for Tesla's brand image in California.

Fox News

Positivesentiment_satisfied
Analyst rating: N/A

Fox News supported Trump's initiative by praising the move and encouraging their conservative viewers to purchase Teslas, which could potentially increase sales despite the negative public sentiment.

Context

Analysis: How Trump's Embrace of Tesla Could Impact Its Market Position

Key Facts and Data Points:

  • Tesla Sales Decline in California:

    • California sales fell by 11.6% last year compared to 2023.
    • Represents 52% of the state’s EV market (which accounts for 35% of national EV sales).
    • Market share dropped from nearly 80% four years ago.

  • Stock Market Impact:

    • Tesla shares have fallen 50% since mid-December, wiping out $800 billion in value.

  • Protests and Backlash:

    • Protesters disrupted Tesla showrooms globally, including incidents in San Francisco and Portugal.
    • An Oregon man was arrested after throwing Molotov cocktails at a dealership.

Market Trends and Business Impact:

  • California's Importance to Tesla:

    • California is Tesla’s largest market, accounting for 35% of national EV sales.
    • The state’s liberal leaning could lead to consumer backlash against Trump-associated brands like Tesla.

  • Declining Consumer Sentiment:

    • Public distaste for Elon Musk has turned into outright fury due to his conservative affiliations and role in supporting Republican causes.

Competitive Dynamics:

  • Opportunity for Competitors:
    • Tesla’s decline could benefit American automakers (e.g., Ford, GM) and foreign brands like BMW, Kia, and Hyundai.
    • These companies are already stepping up to fill the gap in California’s EV market.

Strategic Considerations:

  • Political Influence on Sales:

    • Trump’s public endorsement of Tesla risks alienating California voters, potentially accelerating Tesla’s market share decline.

  • Media and Conservative Response:

    • Fox News host Sean Hannity praised Trump’s move and encouraged viewers to buy Teslas, further polarizing the brand.

Regulatory and Long-Term Implications:

  • Federal Policy Uncertainty:

    • The Trump administration may roll back EV-friendly policies like the $7,500 EV tax credit (which Musk supports ending).
    • Biden-era incentives for EV battery manufacturing remain intact despite Republican opposition.

  • Potential Shareholder Litigation:

    • A 25% collapse in sales could lead to shareholder lawsuits, adding legal and financial risks for Tesla.

Conclusion:

Trump’s overt promotion of Tesla risks alienating key markets like California, where liberal consumers may reject the brand due to its association with conservative politics. This shift could create long-term opportunities for competitors while further destabilizing Tesla’s already volatile stock market position.