Elon Musk Pushed Advertisers Away From X. Now, He’s Driving Away Potential Customers From Tesla
Investors can simply sell their shares if they disagree with Musk’s views, but unfortunately for Tesla owners, they’ll have to settle for an “I bought this before we knew Elon was crazy” sticker. Elon Musk’s PR team has been working overtime to save his companies from the consequences of his actions, but trouble still seems to follow wherever his tweets go — creating risks that investors can no longer ignore.
The cost of controversy: Whether it’s his angry, expletive-laden rants against advertisers or his political posts that antagonize would-be electric vehicle buyers, Musk cares little what people think. Despite his loyal following, his actions are starting to cost him. Musk’s transformation into a conservative mega-donor, his engagement in the Culture War, and a series of intense internet controversies have pushed away businesses and moderates alike — resulting in declines in revenue and trust in two of his largest holdings. Edmunds’s Ivan Drury warns that Musk’s latest antics have “caused problems that never needed to exist.”
- Musk’s off-script comments have created an endless nightmare for X’s CEO, Linda Yaccarino, who’s been grappling with a 24% year-over-year drop in X’s revenue for the first half of 2024.
- Tesla’s brand image has significantly deteriorated, plummeting from 8th to 63rd place in the 2024 Axios Harris Poll 100 — with Tesla’s consideration score in the US falling to 31%, behind Audi, Mercedes, and BMW, which ranged from 44% to 47%.
Why Tesla’s Running On Empty
It’s impossible to separate the art from the artist. Similarly, many electric vehicle buyers are increasingly put off by Tesla’s association with Musk’s polarizing online persona. This could lead to a decline in Tesla’s market dominance. Caliber CEO Shahar Silbershatz believes, “It’s very likely that Musk himself is contributing to the reputational downfall,” with 83% of Americans linking him directly to Tesla, leading to an unfavorable view of the brand.
- Interbrand’s Greg Silverman suggests that while Musk “might be winning some people who like his positions,” the likelihood of him bringing in more customers instead of driving them away is “very low.”
- Musk’s involvement in international politics, including support for controversial leaders like Nicolás Maduro and Jair Bolsonaro, keeps him at the center of global political discussions.
All pain, no gain: The average investor cares about one thing: whether Musk’s actions are affecting Tesla’s shares. While it’s safe to say that telling advertisers to ‘go f— yourself’ on live television hasn’t helped X, it’s unclear whether his comments have contributed to Tesla’s second consecutive quarter of declining sales — or if it’s due to a slower economy hitting the auto market. What is certain is that Musk’s unpredictable behavior is keeping competitors, investors, and loyal customers on edge.
