In hindsight, it was the most selfless, generous alliance in modern political history: Green darling Elon Musk — the father of the electric car industry — partnered with Donald “Drill, Baby, Drill!” Trump to fix the federal government.
Worked out great for Trump: Not only did Musk infuse his 2024 campaign with millions, but he’s now spearheading DOGE, the most ambitious attempt to prune the federal jungle in centuries. Of all the people on the planet, nobody else can match Musk’s unparalleled track record in business administration. His skill set speaks for itself.
What a great win for the American people!
It didn’t work out so great for Tesla stockholders, though. It’s been a rough few months.
And this is just the beginning. It’s going to get far worse. I’m not one for indiscriminately offering financial advice (Legal disclaimer: I’m an idiot. Don’t listen to me, yada yada.), but Tesla stock is gonna drop like a rock.
Barring some kind of miraculous technological breakthrough (real, actual, full-self-driving?), the Tesla brand is now toxic among its target audience. It was something we predicted way back in August:
According to Gallup, 71 percent of Republicans would not consider owning an electric vehicle.
Eighty-three percent of Democrats would consider owning an electric vehicle.
You don’t need to be a statistician to recognize which audience matters most to Tesla’s core business model.
Among Americans adults, Republicans (at 63 percent) and white men (at 51 percent) now have the highest favorable opinions of Musk. But only 9 percent of Democrats feel the same way. [emphasis added]
By aligning himself with Trump, Elon Musk has destroyed his brand — maybe not to conservatives but to the people who actually buy his cars. Because, make no mistake, the “Elon Musk” brand and the “Tesla” brand are intertwined in the public’s eye: Six of one, half-dozen of another.
The liberal base has been defeated, depowered, and derided. Over the past half-year, Trump has turned it into Glass Joe from Punch Out. Targeting Musk’s businesses is all it has left.
And it's gonna go for the jugular.
It’s very nice that Donald Trump and Sean Hannity are showing their support by buying a Tesla. But there just aren’t enough conservatives in the EV market to offset the vast liberal exodus. We’re too niche of a demo.
Tesla can’t continue to lead the EV industry by only catering to us. The numbers simply don’t work: It’s a fatally flawed profit model.
Frankly, more conservatives should be driving Teslas. After Hurricanes Helene and Milton drowned my poor, innocent Alfa, I replaced it with a Model S. It goes from 0 to 60 in 3.2 seconds. (Which comes in handy when the light changes: Yo, I got places to go, man.) It’s objectively a great car.
But the brand is toxic. It’s the reverse of the Bud Light-Dylan Mulvaney controversy. Back then, when Bud Light aligned its brand with a transgender activist, conservatives gloated, “Go woke, go broke!” And Bud Light certainly felt the blowback.
Bud Light sales dropped by about 30%. (Ouch!)
Well, over the last four weeks, Tesla shares have dropped by about 30%, too.
Elon Musk has a fiduciary obligation to Tesla shareholders to maximize the wealth and value of the company. He was already splitting his time between X (a.k.a. Twitter), SpaceX, xAI, and more — which was always a bizarre setup: It’d be like someone running General Motors, Boeing, Meta, and OpenAI simultaneously.
Then, we add the work of DOGE (which Musk says he’ll be involved with for at least another year), and it’s fair for Tesla shareholders to ask if this is still an effective leadership model.
After all, if I’m a Tesla shareholder, I’d prefer a full-time CEO.
DOGE is in the business of firing people. The longer Musk is affiliated with DOGE, the more vilified Musk (and his companies) will be. The longer it goes, the worse the headlines.
Meanwhile, Trump is making peace with Mother Russia (and regaining access to her vast petro reserves), opening up new pipelines, and don’t forget: “Drill, baby, drill!” He’s talked about discontinuing the EV subsidies. The MAGA polices that Trump is pursuing are contrary to Tesla’s financial success.
Too many headwinds.
Prediction: Before 2025 comes to a close, Elon Musk may still own Tesla. But he won’t be running it anymore.
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