Elon Musk, renowned entrepreneur and CEO of Tesla, finds himself at the center of political controversy due to his advisory role to President Donald Trump. As the leader of the Department of Government Efficiency, Musk is tasked with eliminating government jobs, cutting spending, and downsizing regulatory agencies. This growing political profile has raised concerns among analysts about its potential impact on Tesla's brand and sales.
Tesla, previously celebrated for its dominance in the electric vehicle market and its alignment with environmental values, faces challenges as its association with Musk becomes more politically charged. Wall Street analyst Ben Kallo warns that this new political connection could deter potential buyers. Kallo has issued a negative tactical call note on Tesla's stock, expressing concerns that demand for Tesla vehicles is being undermined by Musk's alignment with Trump.
Tesla's sales in Europe have already felt the impact, experiencing a 45% plunge in January. In the United States, reports of vandalism against Tesla dealerships and vehicles further exacerbate the issue. A Tesla dealership in Colorado has been targeted multiple times by vandals, with incidents including fires set at the location. Kallo believes such acts of vandalism could further dampen demand for Tesla's vehicles.
"When people's cars are in jeopardy of being keyed or set on fire out there, even people who support Musk or are indifferent to Musk might think twice about buying a Tesla." – Ben Kallo
The negative sentiment surrounding Tesla's brand has contributed to a sharp decline in its stock value. In 2025, Tesla's stock erased all post-election gains, with shares plummeting by 9% on Monday alone, resulting in a year-to-date decrease of 40%.