Tesla (TSLA) is struggling — and Elon Musk’s politics are to blame.
“With great difficulty,” is how Musk described running his legion of companies on Monday, as more and more of his time gets devoted to the Department of Government Efficiency (DOGE).
“I’m just here trying to make government more efficient, eliminate waste and fraud,” Musk told Fox Business (FOXA)’ Larry Kudlow of his pet project, which has been put to work overseeing massive cuts across almost every federal agency.
The initiative approved by President Donald Trump, has garnered ill will from the very people who made up Tesla’s original customer base — Democrats.
Between 2012 and 2022, about half of new electric vehicles were sold in the 10% most Democratic counties in the U.S., according to a working paper published in October 2023. A third went to the top 5% most Democratic counties.
Musk’s years-long shift toward the right-wing irritated some of those customers, although the performance of Tesla’s EVs helped mitigate the damage.
But that’s starting to change: in EV-friendly California, traditionally Tesla’s biggest domestic market, sales have dropped for five straight quarters. Just 13% of Democrats would consider buying a Tesla, according to a February Morning Consult poll.
As of October 2024 — when Musk was known as a major Trump supporter and financial donor — Tesla’s brand value stood at $43 billion, down from $66.2 billion at the start of 2023. That’s back when DOGE was just a concept being talked about by Musk and Trump on the campaign trail.
The DOGE impact
Now, however, protests are raging at Tesla’s facilities and showrooms.
DOGE has courted controversy at every turn, drawing around two dozen lawsuits from groups looking to block its influence over the government, according to The New York Times’ tally. The group has taken credit for cuts that it did not carry out, aided in the removal of around 62,000 workers, and set the stage for the end of the Consumer Financial Protection Bureau.
That’s led to dozens of protests and rallies across the U.S. criticizing DOGE and Musk. That includes a 300-person rally held at a Tesla showroom in Boston over the weekend and another at a showroom in Vancouver, Washington.
“Tesla, I’m sure, makes fine products and we’re not interested in interfering with their business,” Alan Unell, a member of Indivisible Greater Vancouver, told KGW8. “They are a symbol of Elon Musk, and that is the reason that we are here — to fight against the symbol that is taking control of our government and destroying the democracy.”
Although those protests have been peaceful, there have also been more than a dozen violent or destructive acts directed at the company’s facilities since Trump’s inauguration, according to The Washington Post, including one instance where an individual planted a Molotov cocktail near a vehicle. There have also been several reports of individual vehicles or Superchargers being vandalized.
In France, a dozen Teslas were set on fire near the city of Toulouse, France24 reported. And in Berlin, fires broke out at a construction site for the expansion of a Tesla factory.
“We struggle to think of anything analogous in the history of the automotive industry, in which a brand has lost so much value so quickly,” JPMorgan (JPM) analyst Ryan Brinkman said in a Wednesday research note.
Wedbush Securities analyst Dan Ives, one of Wall Street’s biggest Tesla bulls, has called on Musk to step up as CEO and warned that a lack of attention to Tesla will worsen the company’s brand image. Ives also noted that there has been “little to no sign” of Musk at Tesla’s facilities in recent months.
A more present Musk could become a major asset to the company, according to some analysts. Tesla’s stock often fluctuates based on its CEO’s forecasts and comments on the company’s future.
“Where he could become an asset is when he really steps back into the line,” said Dave Wagner, the head of equity for Aptus Capital Advisors and a Tesla investor. “Like let’s get Elon back on stage for Tesla to rile up some of the bulls here, because that’s what people buy Tesla for.”
Conservatives and bulls join forces
In response, prominent Republicans are calling for conservatives to support Tesla — one EV at a time.
Grant Cardone, the finance guru who spoke at Trump’s October rally in New York, said he bought a new Tesla. Infowars creator Alex Jones announced a Cybertruck giveaway, while Fox News host Sean Hannity said he had picked out a Model S Plaid.
“Get Starlink, Subscribe to [X] Premium, Buy a Tesla or buy some Tesla stock and hold it,” wrote conservative influencer Robby Starbuck, who has organized campaigns opposing diversity programs at major companies. “Whatever you can do big or small matters to fight back.”
It’s unclear if that support will have a meaningful impact on Tesla’s sales, although one analyst said there are as many as 33.7 million potential Tesla buyers among Republicans. The GOP has always been a part of Tesla’s customer base but, overall, electric cars are more popular with Democrats.
Seventy percent of Republicans now favor Musk and 64% of Trump voters favor Tesla, according to a recent survey from the EV Politics Project. About 63% of respondents who said they were “seriously interested” in buying an EV have a favorable view of Tesla.
“I think Elon, by being an extremely high profile MAGA and defined by EVs, has loosened the chokehold a little, which could be the first step to an evolution,” CEO of the EV Politics Project and veteran GOP consultant Mike Murphy told Politico when the survey was published. “And if Elon put his shoulder into it, he could do a lot more” to help conservatives like electric cars.
Problems foreign and domestic
Tesla is also feeling the pain on the international level, taking hits in most major markets.
Tesla is getting hit on “all facets of the company right now,” said Wagner, pointing to soft demand and supply. “You’re getting some of the irrational exuberance pulled back.”
Tesla’s sales across Europe — including Norway and Germany — have sunk over the past few months, partially due to backlash over Musk’s political activities. Musk has brought controversy with his comments on foreign political affairs, including his support for the Alternative for Germany (AFD) in Germany’s recent election or Russia’s war against Ukraine.
A rare outlier is the United Kingdom, which recorded a 42% surge in EV registrations for February. Tesla deliveries grew almost 21% year-over-year.
Tesla’s Chinese shipments last month plunged 49% to 30,688 units, its lowest monthly figure since July 2022. In the highly-competitive Chinese market, BYD (BYDDY) and other domestic firms are growing their share, buoyed by low prices. Several rivals also offer driver assistance software comparable to Tesla’s.
The company last week delivered the Model Y Juniper, its update for the aging SUV, to its first customers. Downtime associated with retooling the four factories that produce the Model Y likely contributed, at least in part, to the company’s issues, according to analysts. Customers may have also delayed orders so they could get the refreshed SUV.
Buy the dip
That was Morgan Stanley (MS) analyst Adam Jonas’ message to investors this week, as Tesla’s stock cratered.
Although shares rose 8% on Tuesday, the stock has fallen by more than 34% since Jan. 1, almost wiping out the benefits of a massive post-election surge. Musk’s net worth has fallen by $126 billion so far in 2025, according to Bloomberg’s Billionaire Index.
UBS (UBS) analyst Joseph Spak on Monday lowered his first-quarter delivery target to 367,000 vehicles from 437,000 vehicles, noting that his team believes orders are somewhat muted. Baird analysts now expect 369,400 deliveries for the first quarter. JPMorgan estimates 355,000 deliveries for the first quarter, down from a prior forecast of 444,000 units and Bloomberg’s consensus for 418,000 deliveries.
“We see the pullback as a buying opportunity,” Jonas wrote in a note, reiterating his overweight rating and maintaining that Tesla is a top-pick stock. Jonas added that the company’s volatility may let his team test their $200 per share bear case, as well as $800 per share bull case within the next year.
But bulls still have a lot to look forward to, as long as Musk keeps his promises. Tesla plans to launch a ride-share service later this year, ramp up production of its Optimus humanoid robots, and begin making the autonomous Cybercab. Musk on Tuesday also announced that Tesla would double vehicle production at its U.S. factories.
“This is the start of the biggest innovation and technology cycle in Tesla’s history ahead over the next few years,” Ives said.