Over the course of 2025, the impact of CEO Elon Musk's political actions on the Tesla brand has been the subject of significant speculation.
According to Reuters, a new economic study quantified the ostensible cost of Musk's globally controversial antics, finding they severely affected the electric vehicle maker's bottom line.
What's happening?
Tesla's star rose sharply throughout the 2010s under Musk's governance, with the 2017 release of the Model 3 marking a high point for the company.
During that formative period for EVs, Tesla nearly became synonymous with "electric car," and its models remained in high demand.
Musk's public persona didn't begin to falter until he acquired Twitter in 2022, renaming it "X." However, in 2024 — not long after he vowed not to support either Presidential candidate in that election cycle — Musk threw his lot and fortune in with Donald Trump.
In June 2024, Politico's E&E News reported that Musk was becoming "close to the man who wants to throttle his business." The following month, Reuters reported that Musk's concerns over the potential end of a federal EV tax credit had softened.
After Trump's 2024 win, the unlikely friends worked closely to advance the goals of the incoming administration, with Musk and his Department of Government Efficiency (DOGE) prominent in the news cycle.
Under Musk's guidance, DOGE's young foot soldiers immediately began dismantling key federal agencies and pressuring federal civil servants to vacate their positions, actions met with widespread horror and chagrin.
Although far from the most domestically disruptive outcome after Musk took a wrecking ball to D.C., DOGE's unapologetic destruction of USAID was perhaps the most unconscionable.
In May, fellow wealthy tech titan Bill Gates decried the loss of USAID, telling the Financial Times that "the picture of the world's richest man killing the world's poorest children" wasn't pretty.
TCD Picks » Stasher Spotlight
💡Stasher's reusable food storage options make it easy and affordable to live life with less plastic
|
Would you rather have a Tesla or a Corvette? Click your choice to see results and speak your mind. |
Tesla 🚙 In the aftermath, paid for supplies like food aid, medical supplies, and contraceptives destined for war zones and impoverished areas literally went up in smoke.
Why is this concerning?
Elon Musk is one person, but his public persona is inextricably intertwined with Tesla's, and his poor public perception could discourage drivers from making their next car an EV.
By May, a well-known Tesla stock booster speculated that the damage Musk caused was permanent and irreversible. Global sales immediately tanked as Tesla abruptly fell from grace.
It certainly appeared that Musk's political foray cost Tesla dearly, and a new working paper from the nonpartisan National Bureau of Economic Research (NBER) put it into numbers.
"Without the Musk partisan effect, Tesla sales between October 2022 and April 2025 would have been 67-83% higher, equivalent to 1-1.26 million more vehicles," NBER economists observed.
The NBER identified an environmental cost, too: Musk's political involvement "undermined California's progress in meeting its zero-emissions vehicle target."
What's being done about it?
It remains unclear whether Tesla can rebound, but the Board has signaled support for Musk's continued leadership.
Tesla shareholders will vote on Nov. 6 on a massive compensation deal for Musk.
Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the planet.
Cool Picks
