Trump’s Support Risks Alienating Tesla’s Customers Amid Stock Decline

NEW YORK – President Donald Trump‘s recent pledge to support Tesla has sparked concerns that it may harm the electric carmaker. Following a severe drop in Tesla’s stock value, Trump announced on his social media platform, Truth Social, that he intends to purchase a Tesla vehicle to back CEO Elon Musk amid widespread boycotts and incidents of vandalism against the brand.

Financial analysts warn that Trump’s association with Tesla could alienate potential buyers. Dan Ives, an analyst at Wedbush Securities, stated, “Tesla is becoming a political symbol of Trump… It’s actually hurting” the brand amid ongoing stock declines. This sentiment follows one of the most significant sell-offs in Tesla’s history, with shares plunging 15% to $222.15 on Monday, marking the lowest price since late October.

In a post, Trump also claimed that “Radical Left Lunatics” were waging an illegal boycott against Tesla, referring to the company as one of the world’s premier automakers and a ‘baby’ of Musk. Despite Trump’s declaration, Tesla has been facing mounting challenges in the market, particularly from increasing competition from rival electric vehicles, especially those from China, and backlash resulting from Musk’s ties with far-right politics.

Musk himself later assured investors on social media that the company’s stock “will be fine long-term.” Yet, the stock still recorded a staggering 45% decrease this year as Tesla grapples with declining sales and a tarnished brand image intertwined with political controversies and vandalism incidents at its showrooms.

The recent turmoil has extended to incidents of vandalism reported at Tesla dealerships across the U.S. Federal prosecutors recently charged a woman for her involvement in attacks against a Tesla dealership in Colorado, including the use of Molotov cocktails. Protesters have also targeted Tesla vehicles on the streets, prompting owners to place bumper stickers stating “I bought it before Elon went nuts” to signify their separation from Musk’s political actions.

In addition to backlash from the public, analysts have indicated that Musk’s support for Trump could potentially lead to significant implications for Tesla employees. The company offers stock options to incentivize its workforce, but with stock values falling below those last offered, this motivation may lose meaning.

Furthermore, the decline in Tesla’s stock could also hinder its ability to raise capital for expansion efforts. In previous years, Tesla capitalized on its growing share price, raising billions to fund initiatives like new factories in Berlin and Texas. Under current conditions, the company may struggle to raise funds through stock offerings, greatly affecting its growth trajectory.

As Tesla shares continue to falter, analysts predict deliveries could decrease by 5% compared to last year. UBS Global Research noted low delivery times, indicating reduced consumer demand for their main vehicles, Model 3 and Model Y. The implications of this trend could resonate within Tesla’s operational and financial strategies moving forward.

Additionally, Musk’s broader political engagements, including support for controversial right-wing parties and statements against international entities, resonate poorly with Tesla’s typically progressive customer base. As sales in primary markets like California and Europe reflect a downturn, analysts are closely watching the ramifications on customer loyalty and brand perception.