Elon Musk’s troubles are seemingly unending, and they have only gotten worse after becoming President Donald Trump’s right-hand man. What may have seem like a good way of ingratiating himself with the American public by helping restructure the budget has become a wave of mass layoffs and the elimination of beloved federal programs that have only brought him heavy opposition.
And it is not just him that is paying the price of these decisions, his beloved company, Tesla, has now become the main target of protestors and vandals that are using the well-known EV brand as a means of retaliation against what they perceive to be abusive policies. While car owners are the ones affected the most by these acts of vandalism, the company as a whole is suffering, with stock plummeting and sale dipping to almost unsustainable levels.
The situation is compounded by the fact that the Trump administration has decided to declare the attacks on Tesla, both the company and the vehicles, an act of domestic terrorism, which has only inflamed the vandals and opposition further. Many are arguing the most of the protests are peaceful and have not damaged any property, just showing up with signs. Others are arguing that graffiti can hardly be considered terrorism, after all it cleans up with a hose and some patience, but the most outrageous crimes have involved throwing Molotov cocktails to dealerships, and that may have crossed the line.
The consequences for Elon Musk
Despite all the protests and the tough on crime rhetoric, the result remains the same. Tesla users are switching to other car manufacturers at record levels. Many are selling their vehicles at a loss or just swapping them out for other electric vehicle brands in order to not be targeted by the angry mob. Others are cancelling their pre orders and moving on to other companies. The more humorous amongst the owners are choosing to change the branding of the car or put stickers with messages targeting Musk.
All these actions have scared off investors and have put shareholders on alert. After all, the bottom line of the company is being affected by the protests in an unprecedented way, and not just in the US, but around the world. And the fears are founded, Tesla’s stock has fallen 42% this year, highlighting increasing investor concerns. However, despite this decline, its current value remains over 60% higher than it was a year ago, around the time Musk started strengthening his ties with President Trump, which might be the only silver lining giving him some reprieve.
But the data does not lie, a new analysis from Edmunds, an online shopping platform, shows that “in March, the highest number of Tesla owners on record have opted to trade their model in for a new or used car of another brand, including Ford, Chevrolet, and Volkswagen.” The report released also explains that there is a direct correlation between Musk’s role in the Trump administration, in particular his role as Director of the Department of Government Efficiency (DOGE) and the loss of confidence in the brand as well as the growing social discontent.
Jessica Caldwell, Edumund’s head of insights explained in an e-mail to CNBC that while this situation is not good for Tesla, the fact that many are unwilling to support the company is giving other automakers the opportunity to take over some of the market shares that the company had cornered. This means that competitors are taking advantage of the moment by “offering competitive pricing, new technology, or simply less controversy could capture defecting Tesla owners and first-time EV buyers.”